Business and company cars
Company cars are vehicles belonging to the company assets, which employees may use privately. This results in a so-called. imputed income, which counts as part of your salary. In the case of company cars, which are also part of the company assets, it is the entrepreneur who also uses the vehicle privately, and the resulting costs are private withdrawals that may not reduce the profit.
For executives and employees working in the field, a company car is usually "on top" of the salary components. If an employee is also allowed to use a company car for private journeys, he must calculate this usage benefit – provided he does not keep a logbook – according to the so-called "private use" method. Taxing the 1-% rule. The situation is different, however, if private use is expressly prohibited by the employer: At the end of 2011, the German Federal Fiscal Court ruled that the use of a company car only for business trips and the commute to work does not constitute private use. Consequence: The tax office was not allowed to apply the 1% rule due to the lack of private use of the company car. This is because taxation according to the 1% rule presupposes that the employee was allowed to use the company car privately.
In the case of business people and freelancers, the private use of a vehicle belonging to the business assets is usually a matter of course. However, the costs attributable to the private journeys may not reduce their profit and are therefore recorded as private withdrawals (usage withdrawal) in the business income.
In the case of company cars, more than half of which are used for business/professional journeys, the tradesperson or. freelancers determine the private share on a flat-rate basis according to the 1% method, d. h. at a rate of one percent of the gross list price plus. of the costs for special equipment per month profit increasing. Alternatively, he can calculate the private share according to the logbook method by keeping a logbook and adding the expenses attributable to the private journeys back to the profit. In this case, the withdrawal value is calculated according to the extent of the actual private use.
Whether the vehicle is part of the business or private assets depends on the percentage to which the entrepreneur actually uses it for business purposes. Before choosing the calculation method, the extent of the business or private use must therefore be determined. the business use must be determined.
1. Business/professional trips
Business or. all journeys are business-related,
- which are in a factual and economic connection with the business (z. B. journeys to customers, business partners, deliveries of goods),
- that employees perform for the employer with the company car,
- between home and business or company premises. place of work and
- Family trips home as part of double household management.
2. Privately induced journeys
This includes in particular journeys
- to the vacation resort or on the weekend for recreation,
- to relatives, friends, cultural or sporting events, shopping trips,
- for private visits to restaurants, lunchtime trips to home,
- in connection with honorary activities and
- in the context of earning income from other types of income (z. B. from a secondary activity carried out on a self-employed basis).
3. Proof of business or private use. professional use
The taxpayer bears the sog. Objective burden of proof, d. h. he must explain the extent of the business use and make it credible. A logbook does not necessarily have to be kept for this purpose. No separate proof is required if the vehicle is "typically" used predominantly for business purposes, e.g. B. if
- it is a taxpayer from a certain occupational group for which it is clear from the nature and scope of the activity that the vehicle is used more than 50% for business purposes (examples: Sales representatives with a large business district; cab operators; agricultural and veterinary doctors; doctors who make house calls on a large scale; obstetricians who are called to home births; craftsmen in the construction and ancillary construction trades) or
- the trips between home and business/work as well as the family home trips already account for more than 50% of the annual mileage.
In the opinion of the tax authorities, the following is sufficient proof z. B. entries in the diary, mileage statements vis-A-vis clients, travel expense statements as well as simple records over a representative period of i. d. R. three months (excluding vacation time). It is sufficient if the journeys for business purposes are recorded with the respective reason and the distance traveled as well as the mileage at the beginning and end of the business trip or the business accounting period.
It is important that the records are made promptly and are not "created" retrospectively at the end of the year on the basis of the invoices, fuel receipts.
Note: If the taxpayer has made the operating or. Once the scope of professional use of the vehicle has been established, the tax office also assumes this for the following claim periods. However, this does not apply if there are significant changes in the type or scope of the activity or the journeys between home and the place of business/work. If, for example, the vehicle class is changed, the scope of use can be checked again in the individual case.
If no private use is declared for the company vehicle contrary to the truth and no investigations into vehicle use were carried out when the profit assessment notices were issued, the final profit assessment notices can be changed by the tax office even years later and the private use can be taken into account retrospectively to increase profit.
If the vehicle is used less than 50% for business or private purposes. used for business purposes, the withdrawal value must be compulsorily calculated according to the extent of private use. If there is no proper logbook, the private use share is determined by way of estimation (cf. for this purpose cap. III. or chap. IV).
4. Flat-rate determination of the withdrawal value for private vehicle use
4.1 1-% rule for private driving
The taxpayer has the choice: He can have the taxation carried out either according to the flat-rate 1% rule or according to the actual private use (logbook method) by submitting the tax return to the tax office. The choice must be made uniformly for the entire business year. In the event of a change of vehicle during the course of the business year, however, a different method of determination may be chosen during the year. If the taxpayer does not make use of his or her option, the calculation is made according to the 1% rule.
The value in use per month is 1% of the domestic list price rounded down to € 100 at the time of initial registration plus. the costs for – also subsequently installed – special equipment (z. B. built-in navigation device, heated seats) including sales tax. The value of a car telephone including hands-free equipment as well as the value of an additional set of tires including rims are not taken into account. The list price is also used for re-imported vehicles and leased vehicles.
Note: At the end of 2010, the German Federal Fiscal Court ruled that costs for the subsequent installation of a liquid gas system in a company vehicle that is also provided for private use are not to be included as costs for special equipment in the assessment basis for the 1% rule.
- of an existing second car,
- Purchase price discounts,
- of an input tax deduction,
- the assumption of fuel costs by the employee or
- the placement of the vehicle in a garage belonging to the employee or rented by the employee
the tax office does not accept. Because it is not the actual acquisition costs of the car that are decisive, but its domestic gross list price at the time of initial registration according to the manufacturer's list price.
Note: The 1% rule can have a very negative effect on used vehicles, because here too the basis is the gross list price (new vehicle price) and not the purchase price.
The monthly values are not to be applied for full calendar months in which private use or use for travel between home and business premises is excluded (z. B. hospitalization and vacation).
In 2011, the Lower Saxony Fiscal Court ruled that the 1% rule based on the gross list price is constitutional despite high discounts offered by car dealers and does not need to be adjusted to the changed market conditions. However, it remains to be seen how the judges of the Federal Fiscal Court will rule on the appeal.
4.2 Multiple vehicles in the business assets
In principle, it is irrelevant whether a vehicle is used by several persons or, conversely, several vehicles are used by one person:
- If a vehicle is used by several persons, if necessary. including employees of the entrepreneur, also privately used, the usage withdrawal determined according to the 1% rule is divided among the persons entitled to use the vehicle. There is no recording of the withdrawal of use per using person.
- If several vehicles are also used privately, the deduction for use must generally be recognized for each vehicle that is also used privately, regardless of whether it is driven by the entrepreneur himself or by his spouse or partner. Child leaves.
Furthermore, a distinction must be made between sole proprietorships and partnerships:
- Sole proprietorship: First, the taxpayer bears the special burden of proof. For taxation does not apply if he can credibly demonstrate that certain company cars are not used privately because they are not suitable for this purpose (e.g. B. Workshop car). The same applies if the vehicles are used exclusively by the company's own employees.
Note: Entrepreneurs who also use several company vehicles for private purposes should consider whether they should alternatively keep logbooks. Only in this way can multiple taxation of private use be avoided.
- Partnership: In this case, the tax office requires the recognition of the 1% usage deduction per partner and vehicle. In the case of several vehicles, this increases again by each privately using relative. If several shareholders only have access to one vehicle for private journeys, the withdrawal of use is only determined once (vehicle-related) and distributed among the shareholders according to heads.
4.3 Surcharge for journeys between home and business
Journeys from the home to the business are not covered by the 1% rule, but must be additionally adjusted:
- Journeys between home and business: 0.03% of the gross list price x distance kilometers x months.
- Family home trips in the case of double household management: 0.002 % of the gross list price x distance kilometers x number of home trips.
Note: Even if the company car is only used on a daily basis for journeys between the home and the business, 0.03% per distance kilometer must be recognized for each month. Only in the case of journeys within the scope of double household management are the actual journeys decisive.
In the context of the wage tax deduction procedure, the employer can, at the request of the employee, carry out the individual assessment upon proof by the employee – limited to 180 days per year – and apply 0.02 % of the gross list price x distance kilometer for journeys between home and place of work.
If several journeys are made daily between the home and the place of business, the flat-rate addition amount is not multiplied. Multiple journeys must also be taken into account when determining the extent of business use.
If an entrepreneur has several business premises at different distances from his home, the following applies:
Example: Entrepreneur A lives and runs a business in A-town (distance home – business: 30 km). Another permanent establishment is located in B-town, 100 km away from his home. With the company car (gross list price: 50.000 €), he drives to the company in B-city on 40 days and to the company in A-city on a total of 178 days. The non-deductible business expenses are determined as follows:
Journeys between several business locations are fully business-related, so there is no surcharge. A workroom is not a place of business because of the physical proximity.
4.4 Cost recovery
Especially in the case of used vehicles, depreciated vehicles as well as motor vehicles where no major (repair) costs have been incurred, it is possible that the flat-rate adjustment value for private use is higher than the actual vehicle costs incurred. In this case, the profit adjustment is limited to the amount of operating expenses actually booked. Consequence: The vehicle is not tax-deductible because the lump-sum value of use neutralizes the total expenses.
Note: When applying the cost capping, the taxpayer must at least have the distance allowance as deductible expenses. It would have to be checked here whether the logbook method or the treatment as private assets using € 0.30 per kilometer driven for business purposes is more favorable.
5. Individual usage value by means of a proper driver's logbook
The logbook method is the legal exception to the 1% method. This means that the private use of a company or business car, which is used more than half for business purposes, can be charged exactly with the part of the total costs attributable to these journeys.
For this purpose, the total expenses incurred for the vehicle must be proven. The driver's log must show the relationship between private journeys, journeys between home and place of work, journeys to the family home and other journeys without any gaps. Otherwise, the lump-sum value of use (1% method) is applied.
Note: The logbook method is particularly advantageous in the following cases. if
- the vehicle is used for private trips only to a small extent, or
- several company vehicles are used by one or more persons or
- the values according to the 1% rule exceed the actual costs incurred for the vehicle.
5.1 Driving record requirements
To prove the relationship of the individual journeys, a logbook must be kept for the entire year, in writing and in a closed form (no loose leaves!).
Alternatively, the logbook can also be kept in electronic form. The prerequisite is, however, that the same information is obtained from this as from a manually kept logbook. In addition, subsequent changes to the data entered must be technically impossible or at least documented as well as disclosed. This is not the case, for example, if the logbook is kept as an Excel spreadsheet. The printout of such a file is therefore unsuitable as proof of the completeness and correctness of the required information.
A driver's logbook that consists of a combination of handwritten, timely and complete records in closed form with subsequently prepared explanations in an Excel file, on the other hand, is proper according to a ruling of the Berlin-Brandenburg Fiscal Court. However, the Federal Fiscal Court has yet to decide on the allowed appeal.
The tax office may not accept the driver's logbook due to minor recording deficiencies (z. B. if the recorded mileage does not exactly match that of the workshop invoices) should not be discarded altogether if it is otherwise plausible and ensures the correct apportionment of the costs.
If errors occur with a certain regularity and similarity in a large number of entries and if, in addition, there are obvious contradictions with the fuel receipts, the Nuremberg Fiscal Court is of the opinion that the driver's logbook kept for the calendar year in question must be discarded as a whole as not being in accordance with the regulations.
Note: In view of the conflicting rulings on the part of the tax courts, particular care is required. Any doubts will be borne by the taxpayer and will necessarily lead to the application of the 1% method.
In the opinion of the tax authorities, a proper driver's logbook contains at least the following information:
- Official registration number of the vehicle, so that it is clear for which vehicle the logbook is kept;
- Date and mileage at the beginning and end of each individual business-related trip. A logbook with rounded mileage data is not proper.
- Launch location;
- destination and – in the case of detours – the route;
- Purpose of the trip and business partners visited; this includes the specification of the respective customer or business partner visited or of the specific object, such as e.g. the company. B. the visit to an authority, a branch office or a construction site. Mere location information is sufficient, if the customer or business partner visited can be determined beyond doubt from the location information. The same applies if its name can be determined in a simple manner with the help of documents that do not need to be supplemented. Several segments of a uniform business trip can be combined into a single entry if the individual customers or business partners visited are listed in the logbook in chronological order. If a business trip is interrupted for private errands, this must be documented in the driver's logbook. The customer or business partner visited must be precisely identified even if this information is subject to data protection in certain individual cases. General information such as z. B. "Customer visit" is not sufficient, since they do not objectively verifiably exclude a private (co-)initiation of the trip.
- Number and total amount of kilometers driven;
- Trips between home and work and family home trips: In each of these cases, a brief note in the logbook indicating the mileage at the beginning and end of the corresponding trip is sufficient. For the recording of private journeys the respective kilometer data are sufficient.
According to the Lower Saxony Fiscal Court, the indication "Hanover" alone is not sufficient for places the size of Hanover, since the places visited in each case can easily be 20 km apart within Hanover. In this respect, the logbook must contain address details or at least the names of streets or districts. For a driver's logbook to be in order, it is also necessary to document detour trips by means of entries. In the dispute, this had led to an extension of a single trip distance by up to 231 km. The Federal Fiscal Court will rule on the pending appeal in 2012.
For some occupational groups (e.g. B. There are exemptions from the requirement to keep records (e.g. for sales representatives, courier drivers, customer service fitters, cab drivers, driving instructors, tax consultants, lawyers and doctors).
Note: The Dusseldorf Fiscal Court has commented on the proof of the exclusive use of a commercial agent's car for business purposes by means of a proper driver's logbook. Accordingly, in addition to the date and the destinations of the trip, the logbook must contain the customers or business partners visited or. – if such are not available – to record the specific action taken on behalf of the company.
5.2 Total costs and private costs
The total cost of the vehicle consists of
- the sum of all expenses necessarily related to the vehicle
- plus. depreciation for wear and tear (useful life for new vehicles: six years); special depreciation is not included in the total costs.
Extraordinary motor vehicle costs (theft of the vehicle, accident damage) are to be attributed in advance to business or private use, and costs incurred exclusively for private reasons (z. B. tolls on a vacation trip), are to be treated in advance as a withdrawal.
Based on the total cost, a mileage rate must be determined. This should be applied to the privately driven kilometers and the commute to work, as well as recorded as a private expense. For the determination of the total costs the gross values are decisive. Thus, z. B. to calculate depreciation, unlike business expenses, from the purchase price including sales tax. For sales tax treatment cf. Cape. VII.
5.3 Choice of method
For each business year the taxpayer can determine the method anew. If he keeps a proper logbook, he can choose between the 1% rule and the determination with the help of the logbook for the taxation of the private journeys. This occurs with the submission of the tax return. The taxpayer is not bound to the choice made in this respect, as far as the tax assessment can still be changed under procedural law. However, a change within the year is only permissible in the event of a change of vehicle.
Here you can choose whether the vehicle should be part of the business or private assets. In the first case, it is a question of "voluntary business assets". Rented or leased vehicles always belong to private assets if they are max. 50% of the vehicle is used for business purposes, insofar as the allocation of the vehicle to business assets has not been made in an unambiguous manner by means of records prepared in a timely manner. Simply recording the leasing rates and other operating costs as business expenses in the determination of profits is not sufficient. The Rhineland-Palatinate Fiscal Court has also ruled that records that were not made in a timely manner and are not plausible in view of the actual circumstances cannot prove business car use for more than 10%. An appeal to the Federal Fiscal Court is pending.
1. Passenger cars as business assets
All expenses in connection with the vehicle are initially to be treated as operating expenses. Subsequently, the expenses attributable to the private journeys are added back as a usage withdrawal. The private use portion may not be valued according to the 1% rule, but is to be valued as a withdrawal at the cost price attributable to the private use (cf. in addition also Kap. II. 5.2) to be valued. For journeys between home and business premises and for journeys home with the family, the non-deductible business expenses are to be determined in the amount of the actual expenses.
2. Vehicle as private property
The costs for the business use of a passenger car can be claimed as business expenses even if the vehicle is part of the taxpayer's private assets. There are again two methods for this:
- Proof of actual costs: The proportion of journeys made for business purposes can be determined by means of a properly kept logbook. The business journeys are then set in relation to the total mileage or. the total actual costs incurred. The share of the costs thus determined that is attributable to the business trips can be deducted as a business expense.
- Calculation on the basis of flat-rate values: The costs for business trips with the private vehicle can be recognized as a business expense at the rate of € 0.30 per kilometer driven for business purposes without individual evidence.
Note: The Federal Fiscal Court (Bundesfinanzhof) will clarify the extent to which property damage to a private vehicle incurred on a business-related trip can be taken into account. It is questionable whether the difference between the current values of the vehicle before and after the accident can be deducted as operating expenses if the damaged vehicle is not repaired. Alternatively, only technical depreciation of a (fictitious) residual book value could be considered.
If the vehicle is used less than 10% for business purposes, it is to be allocated to private assets. For business-related journeys, either the mileage rate determined by means of a logbook or the mileage allowance can be deducted (cf. Chap. III. 2.).
If an employee is allowed to use his vehicle not only for business purposes but also for private purposes, this increases his salary. This applies z. B. also for journeys made by a full-time mayor between his home and the town hall. These are not only because of the associated presence in the municipality basically official nature, so that the private use of the company car – as with any other taxpayer – must be recorded as a non-cash benefit.
Note: In 2011, the Federal Fiscal Court (Bundesfinanzhof) had ruled in several rulings on the regular place of work in the case of several places of work that an employee cannot have more than one regular place of work per employment relationship. In cases where several regular places of work were previously assumed, the taxpayer now only receives the commuting allowance for journeys between home and a regular place of work. In return, he must pay tax on a non-cash benefit due to the private use of his company car for journeys between home and place of work.
The new ruling of the Federal Fiscal Court means that if there is no regular place of work, there is no non-cash benefit if a company car is provided. It is a business-related external activity, so that the statutory per diem meal allowances can be claimed. However, the actual travel costs are not deductible because a company car is used.
According to a ruling by the Federal Fiscal Court in November 2011, if the employer only provides the employee with a vehicle for business trips and the journey to work, the vehicle is not used for private purposes; there is no imputed income (cf. on this already chap. I. and Cap. V. 5.).
If the employee is also allowed to use the vehicle on weekends, during free time and on vacation, the private use share is to be determined either according to the 1% method or according to the driver's logbook method. If the vehicle is also used for commuting to work, the private use portion is increased by 0.03% of the domestic list price per month for each kilometer of distance under the 1% method. This applies regardless of vacation or illness. Alternatively, since 2011 there is the individual assessment of the actual journeys. The employee may claim the commuting allowance as income-related expenses. The employer can also tax the imputed income for travel between home and work at a flat rate of 15% if the employee could claim income-related expenses in the amount of the commuting allowance. The lump-sum taxed salary then reduces the deductible commuting allowance.
1. Determination of the imputed income according to the 1% method
The imputed income by which the employee's income is increased is calculated from 1 % of the gross list price of the motor vehicle per month plus. 0.03 % per month and distance kilometer between home and work. If the employee pays a flat-rate usage fee, this reduces the imputed income (cf. on this also Kap. V. 4.):
Example: An employee uses a vehicle (gross list price 30.000) both privately and for 180 journeys of 25 km each between home and place of work. The employer retains a flat rate of €200 per month for this private use. The imputed income is calculated as follows:
At the end of 2010, the Federal Fiscal Court once again ruled that the supplementary allowance only applies to the extent that the employee actually used the company car for journeys between home and the place of work. If, on the other hand, the company car is z. B. actually used only once a week for journeys between home and place of work, the supplement depends on the number of journeys actually made, according to the case law. To determine the surcharge, the trips must then be valued individually at 0.002 % of the list price per distance kilometer.
The tax authorities, on the other hand, only permit an individual assessment of the actual journeys between home and the regular place of work in the wage tax deduction procedure under the following conditions:
- The employee must declare to the employer on a calendar-monthly basis, in writing and stating the date, on which days he actually used the company car to travel to work; merely stating the number of days is not sufficient.
- The employer has to keep these declarations of the employee as receipts for the payroll account.
Note: Information on how the employee got to the regular place of work on the other working days is not required. In addition, the working days on which the employee uses the company car more than once for journeys between home and the regular place of work must only be recorded once for the individual valuation.
In addition, it is permissible to base the wage tax deduction on the declaration of the previous month in each case. If the employee does not make recognizably false declarations, the employer must carry out the wage tax deduction on the basis of the employee's declarations. In any case, the employer is not under any "obligation to investigate".
- If an individual assessment of the actual journeys between home and regular place of work is made in the wage tax deduction procedure, the employer has to make an annual limitation to a total of 180 journeys for all company cars left to the employee.
- A monthly limit of 15 trips is excluded.
Example: Employee A can also use a company car (middle class) provided by employer B for trips between home and regular place of work. B has date-specific declarations from A on journeys between home and regular place of work for the months of January to June on 14 days each, and for the months of July to November on 19 days each. For the month of December, B has a date-exact declaration of A about journeys between home and regular place of work on 4 days.
In the months of January to June, B must use 14 days as a basis for the individual valuation, in the months of July to November it is 19 days in each case. Due to the annual limitation to 180 trips, only one day is to be used for the individual valuation in December (number of trips from January to November = 179). This results in the following percentages for the individual assessment of A's actual travel between home and regular place of work per calendar month:
If the employee only uses his company car for part of the journey between his home and regular place of work, the entire distance must be taken as the basis for determining the supplement. However, under certain conditions, the tax office accepts it if the employer determines the supplement on the basis of the partial distance actually traveled with the company car. It is necessary that the company car is provided by the employer
- either has been provided only for this part of the journey and the employer monitors compliance with his prohibition of use
- or provide proof of use of another mode of transportation for the remaining portion of the trip (z. B. an annual train ticket issued to the employee is presented).
Note: For this reason, employees should always keep travel cards for local public transport; the employer should also keep a copy of these for his wage records if he only withholds wage tax for the part of the journey made by car.
If the spouse works at the same place of work as the employee, a corresponding annual travel pass should also be kept for the spouse. Otherwise, this could argue that the employee and spouse did drive to work in the company car, together, after all.
In the context of double household management, travel expenses for family trips home and for the. U. 0.002 € per kilometer of distance to be added to the wages.
2. determination of the imputed income according to the logbook method
If the employee keeps a logbook, the monetary benefit is to be determined by the total costs (= expenses of the employer) and the total kilometers driven with subsequent distribution between the distances driven for business and private purposes.
Example: The total cost of the employer's car is 15.000 €, for a mileage of 50.000 km (of which private 10.000 km [= 20 %] and for business 40.000 km [= 80%]). The imputed income is determined as follows:
Regarding. In accordance with the requirements of a proper driver's logbook, the information provided in the chapter. II. 5.1 Said accordingly.
The total costs for the company car are to be calculated as the sum of the net expenses plus. Sales tax to be determined; costs borne by the employee himself are not taken into account. The total costs include only those costs that are directly related to the keeping and operation of the vehicle and are typically incurred during its use. Depreciation for wear and tear must always be included in the total costs; the actual acquisition costs including value added tax must be taken as a basis. However, the total costs do not include z. B. Contributions for a protection certificate issued in the employee's name, road or tunnel tolls and accident costs.
Note: Since 2011, accident costs may no longer be included in the total costs. This regulation applies to both methods of determining the imputed income. There is a simplification rule: If, after reimbursement by third parties (insurance companies), accident costs of up to 1.000 € (plus. sales tax) per damage, this amount can be included in the total costs as repair costs. This means that accident costs up to an amount of 1.000 € (plus. Sales tax) is not to be taxed as a separate imputed income.
If the employee is responsible for the accident during a private trip, i.e. is liable to pay damages to the employer, but the employer waives the damages, a separate non-cash benefit exists in the amount of the waiver (in addition to the non-cash benefit from the use of the company car).
If the employee is not liable for damages (the accident was caused by a third party) or the accident occurs during a work-related trip, no separate imputed income is to be recognized (exception: accident was caused by the employee intentionally or through gross negligence, e.g. by a third party). B. Driving after alcohol consumption causes).
3. Company car with driver
In this case, the employer provides his employee with a vehicle and driver for private journeys and/or journeys between home and work or between home and work. for trips home to the family. In this case, both the flat-rate value and the value of use determined according to the logbook method for the commute to work are increased by 50%. The same also applies to family trips home and private trips, if the driver is predominantly used. If the driver is only occasionally used for private journeys, the supplement is still 40%. If this is only sporadically the case, the surcharge is reduced to 25%.
4. Additional payments by the employee
If the employee makes additional payments for the company car, the following consequences arise:
- Current additional payments by the employee to the employer directly reduce the imputed income in both calculation methods ("netting"). This applies to both flat-rate and mileage-based current usage charges.
- If the employee (partially) bears the fuel costs, this does not affect the imputed income within the framework of the 1% rule. The expenses also do not entitle the driver to a deduction for income-related expenses. When determining the imputed income according to the logbook method, the gasoline costs borne by the employee are not included in the total costs and are not income-related expenses in the opinion of the tax authorities.
- Additional payments by the employee towards the acquisition costs of the vehicle can be offset in the calendar year of payment against the non-cash benefit for private journeys, for journeys between home and the regular place of work and for taxable family journeys home. This applies regardless of whether the employee transfers the additional payment to his employer or directly to the car dealer. When applying the logbook method, the credit is only possible if the acquisition costs relevant for the depreciation calculation have not been reduced by the subsidies.
Note: As the legal situation regarding the correct taxation of wages in the case of additional payments for a company car is very complex, each individual case must be examined separately. We will be happy to advise you.
5. Prohibition of use
If the employee is only allowed to use the company vehicle for business purposes and private use is strictly prohibited by contract, the imputed income is not taxed only if compliance with the prohibition of use is proven by appropriate documents that are to be filed with the payroll account. However, the monitoring options are severely limited, particularly in the case of shareholder-managing directors (cf. also cap. VI.). The employer must present facts which suggest that private use of the vehicle has not taken place. In the event of a breach of the written prohibition of use, the employee should therefore also be threatened with consequences under employment law.
If a ban on use is imposed but not monitored, it is possible that the tax authorities will (subsequently) tax a non-cash benefit according to the 1% rule at the latest in the course of an external wage tax audit.
If, on the other hand, the company car is also used for private journeys, a so-called "private use ban" applies. Prima facie evidence that the company car was actually used for private purposes; the 1% rule is applicable if no logbook was kept.
In a recent case before the Federal Fiscal Court, an employee of a car dealership was only allowed to use a demonstration car for test and demonstration drives and for trips between home and work. According to the employment contract, private use of the car was expressly prohibited. The tax office nevertheless affirmed that the employee had a benefit from use. The Federal Fiscal Court has now contradicted this. According to the judges, the tax office must first establish that the company car was allowed to be used privately in the first place; only then is there prima facie evidence of actual private use. If, however, the tax office cannot determine a private right of use, the 1% rule does not apply. The mere permission to use the company car for journeys between home and work is not sufficient for this purpose. The Federal Fiscal Court referred the case back to the first instance, which must now examine whether the agreed prohibition of private use u. U. has only been made for the purpose of appearances. The employee could "shake" the prima facie evidence that he also drives the company car privately if he claims that he used his own vehicle of at least the same value privately.
6. Use by several employees
If several employees also use a company car for private purposes, the imputed income calculated according to the 1% rule is divided among all employees entitled to use the car. This happens independently of the actual use of the company car by the individual employee in the respective calendar month. Furthermore, it does not matter whether the company car is used by several employees at the same time or successively within a calendar month. For journeys between home and the regular place of work, the employer must calculate the monetary benefit for each employee at 0.03% of the gross list price for each of the distance kilometers and then divide this value by the number of authorized users.
In the case of shareholder managing directors who hold at least half of the share capital of the GmbH and also use the company car privately, a distinction must be made in each individual case:
- If private use is expressly permitted under the terms of the employment contract, the Federal Fiscal Court has ruled that there is always a non-cash benefit in the form of wages and salaries.
- If the GmbH has issued a written prohibition of use for private journeys to the shareholder-managing director when providing a company car, a non-cash benefit is only not recognized if the GmbH also monitors compliance with the prohibition. If a proper driver's logbook is kept, the monitoring can be proven.
- If the shareholder-managing director also regularly uses the vehicle for private purposes despite a ban and if this is not prevented by the corporation, there may be a hidden profit distribution subject to corporation tax for the GmbH. It depends on the individual case. The shareholder then generates capital income.
Note: The Federal Fiscal Court (Bundesfinanzhof) has ruled that the covered profit distribution for the GmbH is not measured at the wage tax value of 1% of the gross list price, but at the actual market value of the benefit of use. This value must still be increased by an appropriate profit markup.
In the case of a vehicle that is used for both business and private purposes, there are three options if the business use exceeds 10%: The vehicle can either be allocated in total to the business or in total to the private sphere or. it is apportioned. The situation is different, however, in the case of a maximum of 10% business use: In this case, it is not possible to allocate the vehicle to the business area.
1. Assignment of the vehicle to the company
If the entrepreneur has permissibly allocated an acquired vehicle, which is used both for business and private purposes, to his company as a whole, he can deduct the input tax amounts attributable to the acquisition costs of the vehicle. If the full or partial deduction of input tax is claimed, the private use is subject to tax as sog. Free transfer of value for taxation purposes. Special rules apply to entrepreneurs with tax-exempt output transactions.
The assessment basis for the free transfer of value can be determined using three methods:
- Flat rate according to the 1% rule: If the vehicle is used for business purposes for more than half of the time and the 1% rule is applied for income tax purposes, this value also applies to VAT for reasons of simplification. There is a flat-rate deduction of 20% for costs not subject to input tax. The calculated amount is a net value to which the sales tax is to be added at the general tax rate.
- Logbook: The sales tax arises on the expenses for the vehicle that are charged with input tax,
insofar as they are proportionately attributable to purely private journeys (without journeys between home and business). Costs without input tax, such as. B. Insurance and vehicle tax, do not belong to it and the depreciation only if the vehicle was acquired with input tax deduction. For VAT purposes, depreciation is spread over five years; for income tax purposes, however, it is generally spread over six years, and in the case of payroll taxation of the non-cash benefit from the transfer to employees, it is spread over eight years.
- Estimation: If the 1% rule cannot be applied because less than half of the vehicle is used for business purposes and the private portion of the use is not evidenced by a properly kept logbook, this portion of use must be estimated. As a rule, the private use portion determined for income tax purposes is to be taken as the basis for sales taxation.
Note: In the opinion of the Federal Fiscal Court, the entrepreneur may not make a higher deduction than 20% from the income tax-relevant withdrawal value of 1% of the list price per month, even if he can prove that less than 80% of his car costs are charged with input tax.
2. Allocation to private assets
If the vehicle as a whole is assigned to private assets, no input tax can be deducted from the acquisition costs. In return, the private use does not lead to a gratuitous transfer of value. However, input tax may be deducted from current expenses (e.g. gasoline and maintenance costs) in the ratio of business to private use. Proper invoices are a prerequisite for this!
Note: Input tax amounts that are directly and exclusively attributable to the business use of the vehicle, z. B. Input tax amounts from repair costs as a result of an accident during a business trip can be deducted in full.
3. Transfer to employees
The provision of vehicles to employees for private (shared) use is always subject to VAT.
As a rule, the gross assessment basis is determined on the basis of the wage tax values, without a 20% reduction for the costs not charged with input tax (in the case of gratuitous use, the reduction is permissible). In the case of family trips home, the wage tax-exempt benefit for the first weekly family trip home must also be subject to sales tax. The wage tax and sales tax assessment bases differ in this respect. The same may apply in the case of additional payments by the employee, which may reduce the assessment basis for wage tax purposes, but not for sales tax purposes.
Example: Employee A uses the company car (gross list price 40.000 €) both for business and private use. During the week, he drives 15 km from his second home to work and on weekends he commutes to his family home 200 km away (46 trips per year). For the private trips, the company requires A to make an additional payment of € 100 per month.
In the case of the logbook method, the usage ratio determined on the basis of the logbook is also to be used as the basis for VAT, whereby the VAT is not taken into account (= net total costs). Costs for which an input tax deduction is not possible may not be deducted from the total costs. The commute to work as well as trips home within the scope of double household management are considered private trips of the employee for VAT purposes.
Note: If the employee is only allowed to use the vehicle for private purposes occasionally on no more than five days a month for special occasions and this is proven, a gratuitous transaction is to be assumed, for which a lower basis of assessment then results. In this case, the deduction of 20% may be made for costs for which input tax cannot be deducted.
4. Private use by shareholders or relatives
A distinction must be made here as to whether the vehicle allocated to the business assets is provided for private use in return for payment or free of charge. If an allowance is agreed, the decisive factor is whether this covers the proportionate private car costs.
Trips that z. B. If the employee drives a vehicle owned by a partner of a partnership from his/her home to the place of work/business, this is a non-business purpose for VAT purposes. d. R. non-business purposes. In this respect, a different assessment is required for VAT purposes than is the case under income tax law, where such journeys are basically regarded as business expenses.
If a partnership provides its partners with company vehicles for private journeys and the partners pay a fee for this, this is subject to VAT. Furthermore, remuneration is also deemed to exist if the partnership debits the private accounts of the partners held with it with the costs attributable to private use. The transfer of the company car against payment does not require the conclusion of a written contract.
Furthermore, the amount of the actual private account debit of the partners is to be assessed as the remuneration for VAT purposes for the vehicle rentals to the partners.
Note: The details here are very complex. We will be pleased to examine the particularities to be observed in this respect for you in each individual case.
All information and data in this information text have been compiled to the best of our knowledge. However, they are made without guarantee. This information is no substitute for individual advice in individual cases.