In September it came to light that due to a procedural change regarding bpm payment, VAT might be charged on bpm. According to the government, this ‘tax on tax’ was not intended and will therefore not be implemented.
Sometime in 2021 or 2022, the procedure for bpm remittance will be overhauled, so that bpm is no longer a ‘recurring item’ for car sellers. Where car sellers normally pay the bpm before the customer buys the car and then add it separately to the selling price, this would add the bpm to the basic selling price in the future and VAT would also be charged on it. Tax on tax, tax experts concluded. That could not have been the intention, according to the Bovag, and now there is a commitment from the Ministry of Finance that this will indeed not happen. The Bovag reports that.
State Secretary Hans Vijlbrief (Finance) is in talks with the sector to resolve any further uncertainties. Han ten Broeke, general chairman of the Bovag, is pleased with this commitment. Otherwise, according to him, it would have been a huge blow to both the consumer and the industry: “New and used cars threatened to become on average € 1,000 to € 2,000 more expensive. On a middle class car such as the Mazda 3 on petrol is now at least € 4,418 bpm. The VAT on this would be € 928. And for a popular business diesel like the Peugeot 3008, these are € 8,831 and € 1,855 respectively. And campers sometimes much more. Very undesirable in these times when new sales are declining sharply. The government is playing an increasingly larger and negative role in the showroom with car taxes and subsidies. Good that the clarity we requested has now also come. For the industry and for the tax authorities. We are pleased with the support of Helma Lodders, who, via parliamentary questions, ensured that the State Secretary provided clarification. ”