VAT on Auto Insurance
Many people assume that car insurance is subject to VAT. VAT stands for Value-Added Tax. The government levies VAT on goods and services.
In the Netherlands, you do not pay VAT on insurance. As a result, it is also not possible to claim a VAT credit. However, you do pay a 21% insurance tax on insurance premiums. This percentage corresponds to the highest VAT rate, which is also 21%. For this reason, many people mistakenly believe that VAT is paid on insurance.
Insurance Tax
So, you don't pay VAT on car insurance; instead, you pay insurance tax. Insurance tax is a tax on insurance policies and is not deductible, even if you use the car solely for business purposes.
Car Insurance Excluding VAT
There is a difference between the VAT on insurance and the VAT you pay when purchasing a (delivery) vehicle. This is because you can insure a vehicle excluding VAT. In most cases, a business owner can claim a VAT credit on business expenses. This also applies to a delivery van. It is therefore a good idea to insure your delivery van excluding VAT. You can claim a VAT refund from the tax authorities. When you insure your delivery van excluding VAT, this means the insured amount is lower, and the premium will therefore be cheaper.
Please note! If you choose to insure your delivery van excluding VAT, you must also take this into account in the event of a claim. In that case, the insurance payout will also be made without the 21% tax.
Compare Car Insurance Policies on Alpina.nl
By comparing car insurance policies, you can save a lot of money each year. With Alpina, you can easily compare different insurers based on both price and coverage. At Alpina, we have about 50 years of experience comparing and purchasing auto insurance policies. Using your license plate number, we can retrieve all the details about your car. After entering a few details and the number of claim-free years, you can start comparing policies.
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