For employees, a company car is an attractive bonus. However, you pay income tax on the car if you use it privately. We explain how the tax is calculated and how to declare the company car in your tax return.
Does the company car have to be included in the tax return?
As a rule, you do not have to include the company car separately in your tax return.
The company car is already taxed via the monthly payroll and should be included in your annual payslip. Therefore, a separate entry in the Taxfix app is not necessary.
You can also deduct costs for commuting to your employer or to your first place of work with a company car. Here you can select "car" as the means of transport.
You only have to enter the company car as a means of transport if you had field work or business trips. In this case, you cannot claim the travel costs.
How income tax is calculated for a company car
If you drive a company car for which private use is contractually permitted, this is considered a non-cash benefit (geldwerter Vorteil). This means that the company car is a kind of salary and must be taxed accordingly.
There are two ways to calculate the income tax due:
The flat-rate calculation (the so-called one percent rule).
The decision for one of the two options is binding. You cannot change it within one year.
The flat-rate calculation with the one percent rule
With a flat-rate calculation, you pay a fixed amount of tax each month as the user of the company car:
1% of the new car list price + 0.03% of the list price per kilometre of one-way travel to work
This amount is added to your monthly gross salary for the calculation of the tax. This increases your tax rate and you receive less net pay.
The gross list price of your company car is 35,000 euros. The distance to your workplace is 20 km. Your monthly salary is 3,000 euros.
These 3,560 euros are taxed as your monthly salary. This is done automatically via the monthly payroll.
If you drive your company car to work less than 15 days a month, you will only be charged 0.02% per kilometre. You have to prove the monthly working days to the tax office.
The one percent rule applies to purchased, leased and rented company cars. The new car list price also serves as the basis for calculation for used cars. An older car therefore does not mean lower tax.
The lump-sum taxation is all the more advantageous the more often you use your company car privately. Because regardless of whether you use the car privately 20% or 80% of the time, you always pay the same amount of tax.
Determining income tax with a driver's logbook
In the driver's logbook, you record all private and business journeys. It is worthwhile in the following cases:
if you travel a lot for business
if the total cost of the car is low
if the car has already been written off
if it is a used car
if you pay the petrol costs yourself as an employee
if you have made an additional payment towards the purchase of the car
The mileage is calculated at the end of the year. For private journeys, you pay income tax and other costs on a pro rata basis. If you frequently drive the company car privately, the one percent rule is more advantageous.
For the driver's logbook, you may not use changeable programmes such as Excel or loose-leaf collections, but only certain software or a classic driver's logbook.
Purely professional use is tax-free
If it is contractually stipulated that you may only use the company car for business purposes, no taxes are due. The tax office may not assume that you are using the car for private purposes. If you use the vehicle privately despite the contractual clause, you do not have to prove that it is used exclusively for business purposes.