From 2020 no BPM refund for taxis

From January 1, 2020, it will no longer be possible for cab companies to recover BPM paid when purchasing a new cab. This has negative consequences for cab companies. For example, cab insurance premiums will go up. What other consequences does this have?

What exactly is BPM?

BPM is the abbreviation for "Taxation of Passenger Cars and Motorcycles. You are required to pay BPM for every passenger car, van and motorcycle registered in the Netherlands. Also when you import passenger cars, delivery vans or motorcycles, BPM is charged by the tax authorities.

BPM for passenger cars is calculated on the net catalog price and CO2 emissions. For vans and motorcycles, it is only the net catalog price. The net catalog price is the list price minus VAT. This change applies to both street cabs, contract transportation and target group transportation of, for example, the disabled, students or a combination thereof.

What will change for cab companies?

Cab companies will no longer receive a BPM refund on the purchase of a new cab starting in 2020. Previously, cab companies could reclaim the BPM paid on a passenger car used at least 90% as a cab from the tax authorities.

The BPM refund on cabs is being abolished because the Dutch government's goal in the Climate Agreement is to cut greenhouse gas emissions in half by 2030 compared to 1990. As a result, all kinds of measures are being taken to reduce those CO2 emissions. This measure should ensure that cab companies become motivated to purchase less polluting cabs. The BPM is lower for cars that emit less CO2. Cars that emit no CO2 at all are completely exempt from BPM. These are the so-called zero-emission cars.

Impact on cab companies

This measure negatively affects many cab companies. The choice in the supply of cars that do not emit CO2 is very limited. In addition, cars that emit less or no CO2 are mostly electric cars. These cars weigh a lot more than a comparable car running on diesel because of the battery pack. This in turn makes for a higher premium because it is calculated in part based on the weight of the car.

For example, a cab company faces higher depreciation costs and a higher all-risk premium. The premium for this coverage is calculated on the vehicle's purchase value. If the purchase value increases because the BPM cannot be recovered, that will mean that the hull insurance premium will increase.

Cab companies that currently have their cab insured on a hull, excluding BPM, will not be able to buy back a comparable cab in the event of a total loss, as of January 1, 2020, for the insured amount. This is because the insured amount excluding BPM has become too low.

People who use cabs a lot will also begin to feel the effects of this new measure. Eventually, cab companies will pass on the additional costs in fare prices. As a result, fewer people may use cab transportation, threatening to deprive the cab company of revenue.

Alpina

Do you have any questions as a result of this article or would you like to talk to us? If so, please contact us. Together we will discuss the consequences and your wishes. We can be reached Monday through Friday between 08:00 and 18:00 at telephone number 088- 6883712.