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.
Inhalt:
- Does the company car have to be included in the tax return?
- How income tax is calculated for a company car
- The flat-rate calculation with the one percent rule
- 0.03% or 0.002% method for your commute to work
- Change from the 0.03% rule to the 0.002% rule
- Determining income tax with a driver's logbook
- Purely professional use is tax-free
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. Therefore, a separate entry in the Taxfix app is not necessary.
You only enter the company car as a means of transport when specifying your commuting or business trips:
- You can deduct commute costs for travels to your employer or to your first place of work with a company car. In our app, you select "car" as the means of transport in this case
- However, you cannot claim trips with the company car in the field or on business trips for tax purposes. In this case, the Taxfix app does not query your route to work
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 logbook
The decision for one of the two options is binding. You cannot change it within one year. If you notice that the chosen method is too expensive, you change at the beginning of the following 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 your 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.
Example:
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 your monthly payroll.
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.
0.03% or 0.002% method for your commute to work
The taxation of commutes to work can be based on a flat rate or on the actual amount of journeys.
In the above example we have chosen the flat-rate taxation: 0.03% percent of the list price is calculated and multiplied by the one-way trip:
0.03% of 35,000 euros x 20 km one-way to work = 210 euros
These 210 euros are taxed.
For this flat rate, the tax authorities assume an average of 15 commutes to work per month.
However, if you drive your company car to work less than 15 days per month, it may be more favourable for you to pay tax on the actual journeys instead of the flat rate. To do this, you use the single trip assessment of 0.002% per kilometre. The calculation is then based on the actual number of journeys.
For example, if you only drive to work 5 days a month, the non-cash benefit is calculated as follows:
0.002% of €35,000 x 20 km to work x 5 (number of trips per month) = €70
In this case, you only have to pay tax on 70 euros.
Change from the 0.03% rule to the 0.002% rule
If the number of journeys you make to work has decreased significantly - for example, because you are in your home office more often - it is worth changing to the 0.002% calculation. You must apply to the tax office for this and provide proof of this by submitting a daily statement of your journeys to work. Ideally, you should also have this list confirmed by your employer.
After you have submitted your tax return, you simply inform your tax office in writing about the desired change and send them the list of your journeys directly so that they can check your case.
In this case, it is not necessary to change your payslip data in the tax return - simply transfer the values from your annual payslip unchanged to the Taxfix app.
Determining income tax with a driver's logbook
In the driver's logbook, you record all private and business journeys. This can be very time-consuming and is usually 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 is also not allowed to assume private use. If you use the vehicle privately despite the contractual clause, you do not have to prove that it is used exclusively for business purposes.