The 2027 tax shift: employers pay 12% tax on petrol cars from 2027

The company car, or auto van de zaak, is a cornerstone of corporate life in the Netherlands. But a major tax change set for 2027 is about to redefine corporate mobility. A new levy on fossil-fuelled company cars will make offering petrol, diesel, or even hybrid vehicles a significant financial burden for employers.

This isn’t just a minor tweak; it’s a deliberate government strategy to accelerate the nationwide shift to zero-emission vehicles, using the corporate lease market as its primary engine. For business leaders, fleet managers, and HR professionals, understanding this change is critical. Here’s what you need to know to prepare.

What exactly is the new tax?

The new levy, officially a ‘pseudo-eindheffing’, is a direct tax on employers for providing non-electric company cars that are used privately by employees.

Who pays? → The employer. The cost cannot be passed on to the employee.

Which cars? → All cars with CO2 emissions, including petrol, diesel, and hybrid models. Fully electric vehicles are exempt.

How much? → The tax is a flat rate of 12% of the car’s catalogue value, paid annually. For a typical company car valued at €50,000, this means an extra cost of €6,000 per year for the employer.

When does it start? → The law is expected to take effect on 1 January 2027.

A crucial “grandfather clause” exists: cars provided to employees before 1 January 2027, are exempt from this tax until 1 July 2030, giving companies a grace period to manage their existing fleet.

From incentives to penalties

This new tax is a key part of the Netherlands’ ambitious climate strategy, which aims for a 55% reduction in greenhouse gas emissions by 2030 and requires all new cars sold to be zero-emission by that year.

For years the government used “carrots” to encourage EV adoption, such as purchase subsidies and lower taxes for employees (Benefit-in-kind). These incentives are now being phased out. The 2027 tax is the “stick”, a powerful financial penalty designed to make the continued use of fossil-fuelled company cars economically irrational for businesses.

The government is targeting the corporate sector for a simple reason: it accounts for the majority of new car sales and is the primary source of vehicles for the second-hand market. By forcing businesses to go electric, policymakers are engineering a future where the used car market is filled with affordable, second-hand EVs.

The financial impact: a clear choice for businesses

The financial implications are stark. The extra €6,000 annual tax on a €50,000 petrol car adds €500 to the monthly cost for the employer, on top of lease payments, fuel, and insurance. Some estimates suggest this could increase the total cost of a non-electric company car by up to 50%.

When this new tax is factored in, the Total Cost of Ownership (TCO) for a fossil-fuelled car will far exceed that of a comparable electric vehicle, even if the EV has a slightly higher lease price. The choice becomes simple: sticking with petrol or diesel will directly and significantly impact your company’s bottom line.

Next steps to take for employers

This is not a distant problem, it’s a ticking clock. Lease contracts signed today could be impacted. Proactive planning is essential.

1) Audit your fleet: create a detailed inventory of your current vehicles, noting their fuel type and most importantly, their lease-end dates.

2) Calculate the cost: model the financial impact of the 12% tax on your budget from 2027 onwards to understand the cost inaction.

3) Revise your mobility policy: begin planning to phase out non-electric vehicles from your company car options well before the 2027 deadline.

4) Plan for charging: develop a strategy for installing charging infrastructure at your offices and creating a policy for home chargers. Managing this new infrastructure, from ensuring uptime to handling reimbursement from home charging, can be complex. This is where a robust charge point management system (CPMS) like E-flux by Road becomes essential, simplifying the entire process for both you and your employees.

5) Communicate with your team: be transparent with employees about the upcoming changes to manage expectations and address concerns early.

The message from the government is clear: the era of the fossil-fuelled company car is ending. For businesses, this is a moment to transform a regulatory challenge into a strategic opportunity to modernise, embrace sustainability, and redefine corporate mobility for the future.

As you make this essential transition, managing your new charging infrastructure will be key. Road offers a comprehensive Charge Point Management System (CPMS) to make this process seamless. From managing charge points at your offices to automating reimbursement for employees charging at home, we provide the tools to ensure your fleet operates efficiently and cost-effectively. Let us handle the complexities of charging, so you can focus on driving your business forward.