As a self-employed person with a business car, you may sometimes have to deal with additional taxable benefit. But what exactly is additional taxable benefit? When is it around the corner and how can you prevent or reduce it? In this article, we tell you all about additional taxable benefit and what you need to know about it as an entrepreneur.
What is additional tax?
Additional tax is a kind of tax you pay for the private use of your business car. Because if you also use that car for private journeys, the tax authorities consider it to be 'wages in kind'. And so you pay tax on that, or the addition. The addition is added to your profit, on which you then pay income tax.
When does additional taxable income apply to self-employed workers?
Additional charges apply if you:
- Have a car in your company's name (i.e. a business purchase or lease)
- And you drive more than 500 kilometres per year privately with that car.
Do you drive less than 500 kilometres privately with the business car? Then you do not pay an additional taxable benefit, but you must be able to prove with a proper trip registration that you stay under the 500 kilometres.
How is the addition is calculated?
The addition is a percentage of the catalogue value of the car. By this we mean the new price, including VAT and BPM. In 2025, the following addition rates apply:
- 17% additional tax rate for fully electric cars (CO₂ emissions of 0 grams per kilometre)
- 22% addition for cars with some CO₂ emissions
An example: Do you have a car with a list value of €35,000? Then your additional taxable value:
> 22% of €35,000 = €7,700 a year. You then add that amount to your profit.
The higher your tax rate, the more you pay. This can range from a few hundred to thousands of euros a year.
Calculate additional taxable income
Use the online calculation tool from Calculate it.co.uk
Note that that 17% addition only applies for 60 months. That is counted from the date on which the car was first admitted. From then on, the Tax Administration will look again at the percentage (based on the rules in force at that time).
How to avoid additional taxes?
You can only escape additional taxes if you meet two conditions:
- You stay under 500 private kilometres per year.
- You keep watertight trip records.
In this trip log, you record per trip:
- The date
- Mileage at departure and arrival
- The departure and arrival address
- The reason for the trip (e.g. 'customer appointment' or 'shopping privately')
So you can do this simply by hand, in Excel, or automatically via a trip recording app or accounting software. Just whatever works for you!
Alternatives to avoid additional taxes
Do you drive a private car for your business? Then you can deduct €0.23 per business kilometre as expenses. That's nice and easy and saves you hassle with additional taxes.
Do you have a oldtimer of 15 years or older (youngtimer)? Then you can make use of the youngtimer scheme. You then pay 35% additional taxable benefit, but only on the daily value of the car (not on the new value).
What about an electric car?
Are you going to drive electric as a self-employed person? Then you are in the right place fiscally! Because in 2025, a reduced additional tax rate of 17% applies to fully electric or hydrogen cars with 0 grams of CO₂ emissions. And do you opt for a car that does emit? Then you just tap 22% additional tax.
So for the entrepreneur who is often on the road and also uses the business car privately, driving electric can make a big difference to the wallet.
Conclusion
Additional taxes can add up considerably if you also use your business car privately. So do you want to keep those costs down? Then take care of a strict trip registration and stay under 500 private kilometres. Would you prefer no hassle? Then a smart move is to opt for an electric car or a youngtimer. After all, these are a lot friendlier in terms of additional tax liability.
