To meet its climate targets, the government wants to accelerate the shift to electric driving. If, from 1 January 2027, you provide a non-electric passenger car to an employee who also uses it privately, you as an employer will face a new tax: the pseudo final levy (pseudo-eindheffing). This measure has direct consequences for your fleet and mobility policy, as well as for the content of your company car policy.
What does the pseudo final levy involve?
The pseudo final levy amounts to 12% of the list price (including VAT and BPM registration tax) per year and is paid by you as the employer through payroll tax. You may not pass these costs on to your employee. The levy comes on top of the existing addition to taxable income (bijtelling); it does not replace it. Note: commuting also counts as private use.
The levy applies to petrol, diesel, LPG and hybrid passenger cars that you make available for the first time from 1 January 2027 and that will also be driven privately. A fully electric car is exempt from this levy, as are a number of other special situations. From 2027, a fully electric car will therefore become the most obvious choice for most employers.
Transitional arrangement until 2031
Cars already made available to employees before 1 January 2027 fall under a transitional arrangement and are exempt from the pseudo final levy until 1 January 2031. However, the car must actually have been made available before that date — a signed contract or a placed order is not sufficient.
What can you do now?
It is wise to now map out which lease contracts are expiring soon, which cars you plan to replace in the coming years, and whether driving electric is practically feasible for your business activities.
For organisations for which an electric car is not yet a suitable option, it may be worthwhile to make a non-electric car available before 1 January 2027, so as to benefit from the transitional arrangement. In that case, make sure the car is actually made available to and delivered to the driver by 31 December 2026 at the latest.
Amending your company car policy
But there is more. The introduction of the pseudo final levy is the ideal moment to critically review your company car policy — an important part of your employment documentation. Are the arrangements on the use of the company car still up to date? Does the policy align with the new tax rules and your desired mobility strategy?
One question that arises here is: as an employer, can you influence the choice of the new lease car? Can you require employees to switch to a fully electric car, or exclude certain car models? Has the company car become an established term of employment for your staff, either because it is set out in the employment contract or because it has been applied consistently for so many years that employees could reasonably rely on it continuing? Depending on the answer, you may not simply amend your policy unilaterally. The same applies to changes in the car category or type. Unilaterally amending terms of employment is subject to strict legal rules, and what appears contractually possible can in practice lead to discussion or a dispute.
Would you like to amend your company car policy, keep control over your employees’ choice of car, or find out whether you can unilaterally implement certain changes? The corporate lawyers at The Legal Company are happy to advise you on both the employment law and tax aspects of this issue, so that you are well prepared for this new legislation.
Stay up to date on the latest employment law developments too
In addition to tax changes surrounding the company car, a good deal is also changing in the field of employment law in 2026 and 2027. As an employer, director, manager or HR manager, would you like to be fully briefed on the current developments in employment law?
Then sign up for the Breakfast Session: Employment Law Update on Thursday 8 October 2026.
During this practical breakfast session, employment law specialist Bente Brouwer LL.M. will guide you through the key developments in employment law. Using recent and upcoming legislation, current case law and recognisable practical examples, you will gain clear insight into the consequences for your organisation. Topics covered include: recent case law on dismissal, underperformance and working from home, employer responsibilities in cases of illness and reintegration, key points regarding fixed-term contracts and flexible working relationships, and practical do’s and don’ts for employers.
Practical information
Date: Thursday 8 October 2026
Time: walk-in and breakfast from 08:00–08:30, programme from 08:30–10:30
Location: Dorpsstraat 75, 1182 JC Amstelveen
Presenter: Bente Brouwer LL.M.
Cost: €195 excluding VAT per participant (including a catered breakfast and presentation)
You can register via this link: https://thelegalcompany.nl/masterclasses/ontbijtsessie-actualiteiten-arbeidsrecht/ We look forward to seeing you on 8 October!
Blog by our corporate lawyer Bente Brouwer LL.M.
