If an employer provides his employee with a company car that may also be used for private purposes, a taxable inclusion should be taken into account if the car is used for more than 500 private kilometers per calendar year. The taxable benefit is a maximum of 25% of the car’s list price for the whole year.

When no taxable benefit is taken into account and the company car is used for more than 500 private kilometers per calendar year, the tax authorities will impose an additional wage tax assessment. The employer is safeguarded from any additional wage tax assessments if the employee has received a "statement of no private use of company car” from the tax authorities. In this situation, possible additional tax assessments will be imposed on the employee.

A case before the Court of Leeuwarden concerned an employee was employed during the whole year 2007. In the period from January 1, 2007 to July 22, 2007, the employer provided the employee with a Volkswagen. This car was not used for private kilometers and the employee had a "statement of no private use of company car” from the tax authorities. No taxable inclusion was taken into account for the company car.

As of July 23, 2007, the employer provided the employee with a Peugeot. This car could be used by the employee for private kilometers and the employee used the Peugeot for more than 500 private kilometers during the second part of the calendar year 2007. The employee returned the "statement of no private use of company car” to the tax authorities and from July 23, 2007, the taxable inclusion for private use of the company car was taken into account.

The tax inspector imposed on the employee an additional wage tax assessment for the period from January 1 to July 22, 2007, because the company car was used for more than 500 private kilometers during the calendar year 2007. In dispute was whether the tax inspector imposed the additional wage tax assessment correctly.

The Court decided, based on the text of the Dutch wage tax act, the historical background of the law, and a ruling of the Dutch High Court from 2008, that the employer provided the employee with a company car the whole calendar year and this car was used for more than 500 private kilometers. In the opinion of the Court the tax inspector did correctly impose the additional wage tax assessment in this situation. The Court did not consider relevant the fact that the first company car could not be used for private kilometers by the employee, because the taxable inclusion does not apply only if the company car is used for less than 500 private kilometers per calendar year.