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New tax system for classic cars in the Netherlands: 25% tax rate for classic cars or day ticket system

Today was the big exciting day for classic car fans in The Netherlands: the Secretary of Finance Mr. Frans Weekers was expected (after a small delay since last Wednesday) to announce the new tax plans for oldtimers. The very first idea (as announced in November 2012) was to ban the tax-free status of cars older than 25 years, but a lot of clubs complained about it: owners of classic cars that don’t use their oldtimer as daily transport would pay a lot of money for a car they’re not using much. The government didn’t like the abuse of the old tax system for classic cars since a lot of owners imported an old diesel car of 25 years old and uses these cars as daily drivers. For more information about this tax avoidance: Bad news for classic car fans in the Netherlands and Dutch government announces new classic car regulations next Wednesday.

It appeared Weekers wants to introduce a 25% tax rate for classic cars: a classic car should pay 25% of the regular road taxes. As an alternative plan Weekers wants to introduce a day ticket system: an oldtimer is only permitted to drive on public road for 60 days per year and must sign up for the day the owner wants to drive his oldtimer. For both regulations Weekers wants to increase the age limit to 30 years for petrol cars and 40 years for classic cars running on LPG or diesel. Lobbyists like the Fehac, ANWB, KNAC and Rai/Bovag don’t agree with Weekers’ plans, and wanted to increase the age limit of the tax-free status to 30 years (and 40 years for cars running on LPG and diesel). Weekers said the ideas of the lobbyists will cost too much money, and will send a letter to the government with seven proposals (and it seems the day ticket system or 25% tax rate will be the best options).

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Several options for classic car taxing

The plans of taxing all classic cars caused a lot of agitation: most owners that didn’t drive a lot with their car said the hobbyist shouldn’t be the victim of tax evaders that are abusing the system. A lot of clubs and organisations started to protest against these plans of the government and the government wanted to revise these plans to spare the hobbyist.

A lot of options were discussed with lobbyists like the Bovag, Knac and Fehac. The Fehac and Knac wanted to increase the oldtimer-status for classic cars from 25 years to 30 years (and 35 years for diesel cars), but Weekers really didn’t like that idea: in an interview (Tros Autoshow) Weekers said he was afraid the import of older diesel cars of 35 years would increase and the problem will be still the same. The Fehac was sticking to their plans and suggestions, and continued trying to convince the government to increase the exemption limit to 30 years for LPG/petrol and 35 years for diesel. Today it seems the Fehac, Bovag, Knac and some other lobbyists proposed to set the age limits to 30 years for petrol cars, and 40 years for LPG and diesel cars.

During the BNR Autoshow-interview Fehac-chairman Bert Pronk also said a fuel surcharge for diesel (and LPG) would also be a good option. A classic car running on regular gasoline will still be tax-free but a car that’s running on diesel or LPG should pay about 50% of the regular road taxes.

Weekers also had the idea to re-introduce the day ticket-system that was used in the past (before the tax-free status for classic cars was introduced). He was convinced this system should work fine if it’s going to be renewed to a fully digital system: if a classic car owner want to drive with his car the owner should have a maximum of 60 days tax-free driving. With an app on a smartphone or a special login on a website the owner can determine on which day he/she wants to drive with the classic car.

Another option was to register the mileage of the classic car. With a limit of the mileage a lot of classic cars that are being used as a daily driver will not longer be able to be used every day. But odometer fraud is done a lot in this country, since insurance companies alreay have a limit in mileage. To register all these mileages will take a lot of time and money, and you’ll still have the risk of fraud.

A source said to me there was another option: since the oldtimer tax system was based on 25 years paying road taxes (The Fehac lobbied with this argument, the other argument was to protect the industrial/mechanical heritage), but since a lot of cars were imported that didn’t paid a single dime for road taxes the policymaker was considering to ban imported cars from the tax-free status since they didn’t pay (or less) road taxes in The Netherlands.

New oldtimer tax system starting in 2014

Today (April 15 2013) Weekers finally announced the new plans for the road taxes of classic cars that are used as daily driver, and on which regulations a classic car will remain its tax-free status. The new plans should be announed on Wednesday April 10 but has been delayed because the involved parties failed to reach an agreement. The consultation with the lobbyists failed: Weekers didn’t want to only increase the age limit but also wanted to introduce a quarter tax rate (meaning an oldtimer should pay 25% of the regular road taxes) or a day ticket system. The Fehac, Bovag, ANWB, Focwa, Rai and Knac just couldn’t agree with these plans. But the Dutch government should be happy with these plans: daily usage of oldtimers will be a lot less with these plans of Weekers, and the hobbyists just have to pay a small fee for their hobby (25% of the road taxes means about 125 Euro per year for the average oldtimer).

Weekers will send the government a letter with seven proposals, but it seems the 25% tax rate system or day ticket system will be the most important options. This letter will be send tonight (April 15) and the new oldtimer regulations must be adopted before May 1 2013. If the government doesn’t agree with one of these seven proposals Weekers said the only option that is left will be a full road tax for classic cars (in that case a classic car will pay the same amount of road taxes as regular cars).

If the majority in the cabinet supports the proposal for the 25% tax rate for classic cars (or day ticket system) it’s very likely the new plans will be adopted without any amendment or changes. The new tax plans will take effect on January 1 2014.

 




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