Foreign registrations and Dutch vehicle tax
There are two types of vehicle tax in the Netherlands: private vehicle and motorcycle tax (BPM) and motor vehicle tax (MRB). These taxes normally apply to residents and companies in the Netherlands with a car registered in their name.
However, these taxes may also apply if a taxpayer from abroad resides in the Netherlands and drives a foreign registered vehicle or if a foreign company registered in the Dutch Trade Register is the holder of a foreign registered vehicle that drives on Dutch roads. I will go into detail further on in this blog.
I will not be discussing the additional tax included in the wage and income taxes for private use of the car.
Residents of the Netherlands are liable for both BPM and MRB if a car is registered to their name. This is the norm. For more information on appealing for exemption, please read my earlier blog on that topic.
The fact that a taxpayer from abroad who resides in the Netherlands, albeit temporarily or permanently—an expat, for example—may also be liable for BPM and MRB is often not recognised and regularly leads to lawsuits. I explain this in more detail below, while already noting that this is a general description with many exceptions that must be assessed for each individual case.
Dutch Population Register (Basisregistratie Personen, or ‘BRP’)
A taxpayer who will be residing in the Netherlands for more than four months is obliged to register in the BRP. This is the case, for example, if someone starts working in the Netherlands and it is clear from the start that he or she will stay in the Netherlands for longer than four months. Registration must take place within five days of arrival in the Netherlands. Failure to register on time can result in a fine.
BRP registration and vehicle tax
If someone has registered or should have registered as a resident in the BRP and drives a vehicle with a foreign registration on the public roads in the Netherlands, they must pay vehicle tax. From that moment on, BPM and MRB must be paid in the Netherlands. A person is liable for BPM and MRB from the date of registration in the BRP or the date upon which they should have registered in the BRP (the so-called ‘woonplaatsvermoeden’ – presumption of residency). In the case of an investigation, the assumption is made that the vehicle was driven in the Netherlands since the taxpayer’s date of registration in the BRP. If the vehicle was made available to the tax payer at a later date or if the vehicle was first driven on Dutch roads at a later date, the taxpayer is responsible for providing sufficient evidence of this fact. Providing sufficient evidence has proven to be difficult.
If someone registered in the BRP or someone who should have been registered in the BRP is pulled over while driving a foreign registered vehicle in the Netherlands, he or she can expect to receive substantial tax bills with additional fines. This is not the case if the taxpayer can demonstrate that the vehicle was not available to them on Dutch roads upon their date of registration.
The taxpayer may be able to prove that his or her main residence, pursuant to international treaties, legislation and case law, is not in the Netherlands. If the taxpayer can demonstrate that their main residence is not in the Netherlands, he or she can claim an exemption for the MRB for a maximum of six months.
This will also affect the BPM, although I expect that in this case the vehicle will be considered to fall under the importing of household goods exemption. Even then it is possible to prove that the Netherlands is not the main country of residence.
There are exemptions for cross-border workers, students, in the case of secondment or for the use of a car on Dutch roads for a maximum of two weeks. I will not go into further detail on this.
Registration in the Commercial Register
The reverse burden of proof also applied to foreign companies that are required to be registered in the Dutch Commercial Register. From the date of registration, these legal entities and companies are deemed to be established in the Netherlands. If they have a foreign registered vehicle registered and use Dutch public roads, vehicle tax is due from the moment of registration in the Dutch Commercial Register.
If a company or legal entity has a branch in the Netherlands, registration is required. In the case of performing business activities in the Netherlands, it may also be mandatory to be registered in the Commercial Register. In practice, determining what are considered to be business activities in the Netherlands can be the subject of debate.
The company or legal entity may be able to demonstrate that its place of business is abroad and not in the Netherlands. In this case the company or legal entity is entitled to request an exemption for the BPM, for example.
Working, living or doing business in the Netherlands for longer periods may have consequences for your vehicle tax, even if you drive a foreign registered vehicle. If you have foreign employees who come to work in the Netherlands for longer periods and bring their car with them, make sure you inform them of Dutch vehicle taxes. Vehicle taxes are also applicable for foreign companies that require registration in the Dutch Commercial Register.
If you have any questions, feel free to contact me.
R.W.M. te Kaat
+31 314 369111
+31 6 11274485