Glossary A–Z
109 terms on business leasing, car insurance, fleet management and business driving tax, explained briefly and clearly.
A
- Addition to taxable income (bijtelling)
- The portion of a company car's list price that is added to your income for private use.
- Addition to Taxable Income Percentage
- The percentage of the catalogue value that applies as an addition to taxable income (bijtelling); dependent on the year and type of car.
- Annual Accounts
- A financial overview of an enterprise for a financial year, including the balance sheet and profit and loss account.
- APK
- Algemene Periodieke Keuring (General Periodical Inspection): a mandatory check to ensure a car meets legal safety and environmental requirements.
B
- Balance sheet
- An overview of a company's assets and liabilities at a specific moment in time.
- Bonus-Malus Scale
- A system where your insurance premium decreases with claim-free years and increases after a claim.
- Book Value
- The value of an asset in the accounting records: acquisition cost minus depreciation.
- BPM
- Tax on passenger cars and motorcycles (Belasting van Personenauto's en Motorrijwielen), paid once upon initial registration in the Netherlands.
- Breakdown Assistance
- Assistance in the event of a breakdown, often included in an operational lease contract or insurance.
- Business asset
- An asset that a company uses for more than one year to generate revenue, such as machinery or a commercial vehicle.
- Business Leasing
- Leasing a car or asset in the name of a company.
- Buyout sum
- The amount you pay when you terminate a lease agreement prematurely.
C
- Catalogue Value
- The official new price of a car including VAT and BPM, which forms the basis for the addition to taxable income.
- Chamber of Commerce Registration
- Registration of an enterprise with the Chamber of Commerce (Kamer van Koophandel).
- Charging Card
- A card used for charging at public charging stations; costs are settled afterwards.
- Charging Station
- A charging point for an electric car, at home, at work, or publicly.
- Claim-free years
- The number of years you have driven without making an insurance claim; this determines your discount on the premium.
- CO2 Emissions
- The amount of carbon dioxide a car emits per kilometre; influencing BPM and motor vehicle tax.
- Commercial vehicle
- A vehicle primarily used for the transport of goods, such as a delivery van.
- Commuting (Home-Work Travel)
- Journeys between home and work; considered business travel for the 'addition to taxable income' (bijtelling) and private travel for VAT purposes.
- Company car
- A car made available by an employer or one's own company for business and, if applicable, private use.
- Company car policy
- Agreements between employer and employee regarding the use of a company car.
- Contract Duration
- The length of a lease agreement, usually expressed in months.
- Contract Takeover
- The transfer of an ongoing lease contract to another party.
- Credit Check
- Verification of an applicant's creditworthiness before financing is granted.
- Creditworthiness
- The extent to which an applicant is deemed capable of repaying financing.
- Current Market Value
- The value of a car at a specific moment, taking into account age, mileage, and condition.
D
- Dealer
- A business that sells cars and often also provides maintenance and warranty services.
- Declaration of no private use
- A declaration from the Dutch Tax and Customs Administration (Belastingdienst) allowing an employee to avoid **addition to taxable income (bijtelling)** if they do not drive more than 500 km privately per year.
- Delivery van
- A vehicle designed for goods transport and treated differently for tax purposes than a passenger car.
- Depreciation (accounting)
- The annual decrease in value of a car or business asset that you record as an expense.
- Down payment
- A one-off payment at the start of a lease agreement that reduces the amount to be financed.
E
- Early repayment
- Repaying a financing agreement (partially) earlier than agreed.
- Economic Owner
- The party who bears the risks and benefits of an asset, even if it is not yet legally theirs.
- Electric Vehicle
- A vehicle that runs entirely on a battery charged with electricity.
- Employee Contribution
- An amount paid by an employee for a company car, for example, above the standard lease amount.
- Equipment Lease
- Leasing of business assets such as machinery, trailers, and other equipment.
- ERE
- Renewable Energy Unit: a tradable certificate that can be generated when charging an electric vehicle.
- European Accident Statement
- A standard form on which parties involved in a collision collectively record the circumstances.
- Excess
- The portion of a claim that you pay yourself before the insurance company settles.
- Excess Mileage
- Kilometres driven above the agreed mileage, which are charged afterwards.
- Excise duty
- A tax on, among other things, fuel, which is included in the price at the pump.
F
- Fair Wear and Tear
- Normal wear and tear for which you are not required to compensate upon returning a leased vehicle.
- Financial Lease
- A form of leasing where you are the economic owner and fully own the vehicle after the final instalment.
- Financier
- The party that provides the funds for the purchase of a vehicle or business asset.
- Fixed Sum / Forfeit
- A fixed, predetermined amount or percentage that replaces actual costs in a calculation.
- Fleet
- All vehicles used by a company.
- Fleet Insurance Policy
- A single insurance policy covering multiple vehicles belonging to a company.
- Fleet management
- Organising and overseeing all aspects related to company vehicles.
- Fleet Manager
- The individual within an organisation responsible for the vehicle fleet.
- Fleetmanagement
- The Dutch loanword for fleet management: organising and overseeing all company vehicles.
- Fuel card
- A card used to pay for fuel, which is then reimbursed or settled as a business expense.
- Fully comprehensive
- Car insurance that also covers damage to your own car, even if you caused it yourself.
G
- GAP Coverage
- Covers the difference between the market value and the outstanding lease debt in the event of a total loss or theft.
- Grey Registration Plate (Commercial Vehicle Registration)
- The registration plate for a commercial vehicle, such as a van, which is subject to specific Dutch fiscal rules.
H
- Home charging
- Charging an electric car at your own residence.
- Hybrid Car
- A car with both an internal combustion engine and an electric motor.
I
- Imported Car
- A car that has been imported from abroad and registered in the Netherlands.
- Interest
- The fee you pay for borrowing money.
- Investment Deduction
- A fiscal scheme that reduces your profit when you invest in business assets.
J
- Journey Log
- A record of all journeys demonstrating the extent of private mileage.
K
- KIA
- Small-scale Investment Deduction (Kleinschaligheidsinvesteringsaftrek): a deductible item for entrepreneurs who invest in business assets.
L
- Lease
- An agreement where you use a vehicle or business asset in exchange for a periodic fee.
- Lease Agreement
- The written agreement that outlines the terms and conditions of a lease.
- Lease Instalment
- The periodic amount paid for a lease.
- Leasing Company
- A company that acquires and leases out vehicles or business assets.
- Legal Owner
- The person in whose name an asset is officially registered.
- Lessee
- The party that leases a vehicle or business asset.
- Lessor
- The party that leases out a vehicle or business asset.
- Liquidity
- The extent to which a company has immediate access to cash to meet its obligations.
- Loss in value
- The decrease in a car's market value over time, also called value depreciation.
M
- Maintenance Contract
- An agreement in which maintenance and repairs are covered for a fixed fee.
- Margin Car
- A used car where VAT has only been calculated on the seller's margin and is not reclaimable.
- Mileage Agreement
- The agreed number of kilometres per year in an operational lease contract.
- Mileage Allowance
- Reimbursement per business kilometre driven with a private car.
N
- Net Addition to Taxable Income
- The actual monthly cost of the addition to taxable income (bijtelling) after tax.
O
- Off-balance
- Financing that does not appear as an asset and liability on the balance sheet, as is often the case with operational lease.
- On-balance
- Financing that appears on the balance sheet, as with financial lease.
- Operational Lease
- A lease type where you use a car for an all-inclusive monthly fee; the leasing company remains the owner.
P
- Passenger Car
- A car intended for passenger transport, with its own regulations for vehicle registration tax (bpm) and addition to taxable income (bijtelling).
- Plug-in Hybrid
- A hybrid car whose battery can also be charged via a plug.
- Private Use
- The use of a company car for non-business journeys.
- Purchase value
- The price paid for a car or business asset, including options and accessories.
R
- RDW
- Rijksdienst voor het Wegverkeer (Dutch Vehicle Authority): registers vehicles and number plates in the Netherlands.
- Refinancing
- The re-financing of an outstanding amount, for example, a balloon payment.
- Replacement vehicle
- A temporary car provided during maintenance or repair of your own vehicle.
- Residual payment
- The amount outstanding at the end of a financial lease contract.
- Residual Value
- The expected value of a car at the end of the contract term.
- Return
- The return of a lease car at the end of an operational lease contract.
- Road Tax
- Tax paid for owning a motor vehicle, also known as vehicle excise duty.
S
- Sale and Leaseback
- Selling a business asset to a financier and immediately leasing it back.
- Short lease
- Leasing a vehicle for a short period, usually from a few months up to a year.
- Standard Lease Amount
- The maximum lease amount an employer pays for a company car.
- Start-up entrepreneur
- Someone who has recently started a business and often does not yet have annual financial statements.
T
- TCO
- Total Cost of Ownership: all costs associated with a vehicle over its entire period of use.
- Termination of employment
- The end of an employment contract; often relevant for the settlement amount of a lease car.
- Test Drive
- A short drive to test a car before making a decision.
- Third-party liability insurance
- Legally mandatory insurance for damage you cause to others with your vehicle.
- Third-party, fire and theft
- Insurance that, in addition to third-party liability, covers theft, fire, storm, and glass damage. Also known as WA+ in Dutch.
- Total loss
- Damage where the cost of repair exceeds the value of the vehicle.
- Trade-in
- Trading in your current car as part of the payment for a new car.
U
- Under Mileage
- Kilometres driven below the agreed mileage, for which a refund may sometimes be issued.
- Used Car
- A pre-owned vehicle.
V
- VAT
- Value Added Tax (Btw - Belasting over de toegevoegde waarde) that businesses charge and can often deduct.
- VAT Car
- A used car where the VAT is listed separately on the invoice and may be deductible.
- VAT Correction for Private Use
- Annual correction of deducted VAT for the private use of a company car.
- Vehicle Registration Number
- Unique registration of a vehicle with the RDW (Netherlands Vehicle Authority).
W
- Warranty
- A commitment from the manufacturer or seller to repair defects free of charge within a specified period.
- Working Capital
- The funds a company has available for its day-to-day operations.