Shipping free of charge 
30 days return policy 
Climate-neutral online shop shipping 
Free Hotline 0800 7678466 
Private use of company cars
When is my company vehicle considered a pecuniary benefit and how do I proceed if the vehicle is used privately? In this article you can read about what to watch out for when using your company car privately.
Do you use a company car and are you a craftsman or service technician with the vehicle to customer appointments? How are these journeys evaluated by the tax office and which tax guidelines must be taken into account? There are actually some tax issues that you might misunderstand at first glance. We try to shed light on how to properly tax your company car:
Social security obligation and prima facie evidence
It is clear that a company car is subject to wage tax deduction as a pecuniary benefit and is therefore subject to social security if it is used for private purposes. The pecuniary benefit is credited to the employee’s gross wage for tax purposes, but is then deducted from the net earnings. When it comes to taxation, it is initially assumed that a company car is also being used privately: the so-called prima facie evidence.
Prima facie evidence
If you have a company car at your disposal, the tax office will initially assume by prima facie evidence that you are also using it privately. If this is not the case because you are only traveling privately with your own vehicle or bicycle, you should definitely refute this prima facie evidence in order to avoid additional payments. For tradespeople with commercial vehicles and in-vehicle equipment, prima facie evidence is easy to refute.
For example, if your employer excludes private use in writing or if the vehicle (because it is a workshop vehicle or assembly vehicle) is obviously not suitable for private use. For vans, commercial vehicles with a windowless loading area are only used for the transport of goods, which tends to rule out using them for private trips with the family. It helps if you can show the tax office that you have registered another private vehicle.
There is no monetary benefit for fitters and field service employees who provide the vehicle for purely operational interests. For example, because the vehicle is only taken home because the route to the next location can be started directly from there and the vehicle does not have to be picked up at the company first. In these cases, the employee’s time is used more efficiently, and the company also benefits from savings in parking spaces and vehicle organization.
If you still use the company car privately – even if the above exceptions apply – then the obligation to tax the monetary value benefit applies. This taxation can be made at a flat rate of one percent of the gross value of the vehicle per month or by means of an exact listing of all trips in the logbook.
What does that mean in concrete terms?
This is how the legislature sees it
At least 50 percent operational use
If at least 50 percent of the company car is used for operational reasons, the vehicle counts as part of the operating assets. In this case, company car costs can be claimed as business expenses. With regard to taxation, you can choose between the 1 percent rule and the logbook.
The operational use of the company car must be credibly proven to the tax office, for example by keeping a simple logbook or by submitting receipts of company journeys.
Less than 50 percent operational use
In this case, the company car is considered a voluntary business asset. The self-employed can decide whether the vehicle belongs to company assets or private assets. With the help of a logbook, the proportion of business and private trips is determined. On this basis, the operating costs of the vehicle are allocated proportionally to the operating expenses of the company.
The 1 percent rule
In practice, the 1 percent rule is usually used: the company adds 1 percent of the gross list price of the car to the income subject to tax and social security contributions in the monthly payroll. For trips between home and work, 0.03 percent of the list price is added per month per kilometer.
An example: If the list price of the vehicle is 45,000.00 euros, the employee has a pecuniary benefit of 450.00 euros. That makes 5,400.00 euros per year. These are included in income and must be taxed.
This amount can be reduced by a usage fee agreed between the employee and the employer. This means that the employee pays an agreed monthly fee for private use of the company car, for example EUR 150. These are deducted from the net salary – and reduce the tax burden of the 1 percent rule.
The advantage
There is no additional work waiting for the tax return: the pecuniary benefit is included in the wages and is entered as a whole in Appendix N. For the tax office, the 1 percent rule is always based on the full monthly amount, even if it can be proven that the car was only used privately on a few days (Finanzgericht Baden-Württemberg, Az. 6 K 2540 / 14).
Even if the company only provides a used car, the list price applies to a new vehicle. A discount on the purchase price granted by the retailer does not change this. Costs for special equipment and extras will be added if the vehicle has them when it is first registered. Extras installed later do not count towards the tax (BFH, Az. VI R 12/09).
Compensation for electric vehicles
In the case of environmentally friendly company cars, employees have to pay tax on a lower pecuniary benefit: electric vehicles that have been purchased or leased since January 1, 2019 and until the end of 2021, employees will only have to pay 0.25 percent of the domestic amount from 2020 instead of 1.0 percent Tax the list price per month as a monetary benefit. The list price of the vehicle must, however, be less than 40,000.00 euros.
The special rule also applies to electric scooters, e-scooters, e-bikes and pedelecs that are classified as motor vehicles.
Employees with electric company cars, which were more expensive or were purchased in 2018, and employees with hybrid and fuel cell vehicles also benefit: after all, they only tax 0.5 percent of the list price as a pecuniary benefit.
The logbook
Alternatively, private trips with a company car can be settled by keeping a logbook. However, there are some special features to consider. The Federal Finance Court requires that the logbook be in the form of a book and that it be updated promptly. For recognition by the tax office, the following entries must be made after each trip:
Date of the trip
Itinerary and destination
Details of the business partner visited
Mileage at the beginning and at the end of the trip
Private trips must be clearly marked as such in the logbook!
For you as a craftsman this means …
Which taxation is more favorable must always be determined individually. There is no rule of thumb here, but there are guidelines.
It is best to note the following points:
the annual mileage in kilometers
how often is the company car used privately
how far away is your place of work
the vehicle value, which depends on the model
If the flat rate taxation does not correspond to your actual driving behavior, it is best to use the logbook to calculate the exact journey. This is particularly useful if private journeys only make up a small proportion. The way to work also plays a role when choosing the calculation method. As an employee, if you take the company vehicle home and drive it back to the company in the morning, special rules apply. Then the 0.03 percent rule applies. The value determined according to the 1 percent rule is increased by this value per kilometer to work. Vacation and illness do not apply, the fixed amount is due every calendar month. The journey from the home to the first place of work, usually the place of work, increases the flat rate by 0.03% of the gross list price. This does not apply to field service employees as soon as they drive directly from their place of residence to the customer appointments without going through the company. This trip is not considered to be a commute to work, but as a trip as part of an external activity Since not every working day begins with a customer appointment, there is a 0.002 percent rule. This is worthwhile if the sales representative has to commute to the first place of work on fewer than 180 days a year. The logbook is nevertheless the recommended alternative because of the detailed documentation. A change between the 1 percent rule and a logbook for taxation of your company car is only possible at the turn of the year. But this every year. You can switch within a calendar year if you replace the vehicle with a new one yourself.
There are no comments yet. Be the first!
We look forward to receiving your feedback on this post.