‘Tax on bpm threatens to make cars considerably more expensive’

De Bovag has examined the new Tax Plan and found a small change with potentially major consequences. There is a risk that VAT will have to be paid on bpm as of 2021 or 2022.

According to the Bovag, the handling of bpm payment by car companies is changing and this may have consequences for the price that is charged to the customer. At the moment it still works that the bpm amount of a new car is determined at the first registration and then the final bpm amount is determined at the first registration. The latter amount is then paid by the car company as a ‘recurring item’ and can thus be passed on to the customer VAT-free. In the new situation, the bpm must be paid immediately upon first registration, according to the Bovag ‘to save the tax authorities a lot of work’. The only problem is that the bpm amount can no longer be recovered separately from the customer as a recurring item, but the amount is added to the total amount of the car and VAT is subsequently charged on that entire amount.

The trade association from Bunnik illustrates that this ‘tax on tax’ will cost car buyers a lot of money: “That amounts to between € 1,000 and € 2,000 on top of the price of a new car. For campers, the amounts are much higher. € 50,000 bpm, which would lead to an extra € 10,000 VAT. ” It can also generate an expensive additional cost item for used cars: “Used vehicles that do not fall under the so-called margin scheme, whether they are imported or traded on the Dutch market, will have to deal with this problem.”

It seems, according to the trade association, that it is an unintended effect of an apparently small change. De Bovag states that it will point this out to the Tax and Customs Administration and the Ministry of Finance, among others. The goal is clear: to counteract this effect and ensure that no more tax has to be paid. “After all, car taxes in the Netherlands are already among the highest in Europe.”

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