How is the taxed fringe benefit for a car worked out?
When does this apply?
This applies when the employer gives the employee a car, and the employee may also use it privately. Driving to and from work also counts as private use.
Why is it taxed?
Private use of a company car counts as extra income. So an amount is added to the employee's wages, and tax is paid over it. This is called a taxed fringe benefit. (A fringe benefit is something extra an employee gets on top of their pay.)
How much is added?
Each year, 15% of the car's value when it was new is added to the wages.
This value is also called the catalogue value. It includes:
- turnover tax (the tax paid when buying the car), and
- import duties (the tax paid to bring the car into the country).
Suriname is different
For payrolls in Suriname, the amount is not 15%. It is 2% of the car's value when it was new.
Does the employee pay something for the car?
If the employee pays part of the costs of the company car themselves, you take that amount off the fringe benefit.
Example
- A company car cost XCG 50,000 when it was new.
- 15% of 50,000 = XCG 7,500 per year.
- The employee pays XCG 1,200 per year for the car.
- 7,500 − 1,200 = XCG 6,300.
- So XCG 6,300 per year is added to the employee's wages.