Taxi driver bookkeeping: VAT, trip records and car benefit
Written by Ilias Aarrass7 min read · Published on · Last reviewed on 
In short
Taxi transport counts as passenger transport and carries 9 per cent VAT, while fuel, maintenance and equipment sit at 21 per cent, so you often end up with a refund.
- Insurance premiums are exempt from VAT, so nothing is reclaimable there.
- Log your empty kilometres too, or an unexplained gap opens up against your total mileage.
- Demonstrably driving fewer than 500 private kilometres a year avoids the addition.
- If you accept cash, your cash records must balance daily.
As a self-employed taxi driver your records differ from the average freelancer's on two points. You charge 9 per cent VAT on rides while fuel, maintenance and insurance largely sit at 21 per cent, and your trip records are not a formality but the document an audit turns on. This article covers both.
Nine per cent on rides, twenty-one on costs
Passenger transport falls under the reduced VAT rate of 9 per cent. That applies to taxi transport just as to bus, train and boat; parcel delivery is goods transport and simply sits at 21 per cent. So you charge 9 per cent on your invoices and ride receipts.
Your costs sit differently. Fuel, maintenance, tyres, car washes, your on-board computer and your insurance are largely at 21 per cent. Insurance premiums are even exempt, so nothing is reclaimable there; see VAT exemption or zero rate.
The result is that you often pay more VAT than you remit and end up with a refund. That is not an error in your return; it is normal for this sector.
| Item | VAT |
|---|---|
| Taxi ride (passenger transport) | 9% payable |
| Fuel, charging, maintenance | 21% reclaimable |
| On-board computer and meter | 21% reclaimable |
| Insurance premiums | Exempt |
| Road tax | No VAT |
Trip records: where audits land
Your on-board computer already logs rides, but that does not exempt you from being able to show complete records. In a tax audit this is the first thing asked for, because it is the only way to verify your turnover.
- Date and time of every ride
- Odometer reading at start and end
- Departure and arrival address
- The amount charged and the payment method
- Rides without a passenger recorded separately: empty kilometres and commuting
Cash and cash records
If you accept cash, the same requirement applies as in hospitality: your till must balance daily. Opening balance, receipts, payments, closing balance, and that closing balance must match what is actually in your car.
A negative cash balance is the clearest sign that turnover is missing, because you cannot spend money you do not have. More in cash records.
The car: benefit in kind or not
If your taxi is a business asset and you also drive it privately, a benefit in kind applies. Demonstrably driving fewer than 500 private kilometres a year avoids it, but the burden of proof is entirely yours: you show it with your mileage records.
For VAT there is a separate private-use rule, distinct from the income tax benefit. You correct it once a year in your final return; see private use of a car and VAT.
If you are unsure whether the car should be a business or private asset, work out both options. That is covered in buying, leasing or driving private.
Driving for a platform or dispatcher?
If you drive via an app or dispatcher, watch out for false self-employment. If the client sets your rate, your rota and your route, that resembles employment in tax terms, even with your own business registration.
Working for several clients, setting your own rate and bearing your own business risk puts you on solid ground. Document it: that is exactly what you need to show in a dispute.
Frequently asked questions
Which VAT rate applies to taxi transport?
Nine per cent. Taxi transport counts as passenger transport, which carries the reduced rate, just like bus, train and boat.
Why do I often get a VAT refund?
Because you remit 9 per cent on rides while fuel, maintenance and equipment sit at 21 per cent. So you pay more VAT than you remit. That is normal for the sector, not an error.
What must my trip records contain?
Date and time, odometer readings at start and end, departure and arrival address, the amount and payment method. Log empty kilometres too, or an unexplained gap appears against your total mileage.
Do I pay a benefit in kind on my taxi?
Only if you also drive it privately. Demonstrably fewer than 500 private kilometres a year avoids it, but you must prove it with complete mileage records.
Am I self-employed if I drive for a platform?
It depends on the actual situation. If the platform sets your rate, rota and route, that resembles employment. Several clients, your own rate and your own business risk point to genuine self-employment.
Sources
- VAT rate for passenger transportBelastingdienst · belastingdienst.nl
- Requirements for a trip recordBelastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
