Welfare Effects of Distortionary Company Car Taxation

Eva Gutiérrez-i-Puigarnau and Jos van Ommeren ()

No 07-060/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: In Europe, company cars are offered by employers as fringe benefits to their employees at a lower price than employees pay in the car market, mainly due to favourable taxation of company cars. We analyse the welfare effects of favourable taxation of company cars for the Netherlands. The estimated annual welfare costs of the distortionary taxation of company cars are estimated to be at least €2,000 per company car. For the whole of Europe, these welfare costs are estimated to be at least €40 billion per year.This discussion has resulted in a publication in 'International Economic Review'.

Keywords: Company car; car ownership; car value; welfare costs (search for similar items in EconPapers)
JEL-codes: D12 D61 J33 R41 R48 (search for similar items in EconPapers)
Date: 2007-08-03, Revised 2009-03-20
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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