company car
June 27, 2009 | 100,00 EUR | answered by Dr. Dr. Danjel-Philippe Newerla
Hello and good day, currently have the tax audit in the house and problems with the recognition of my company car. The car was purchased in 2007 with input tax deduction and also sold again in the following year with input tax deduction - so far so good. The tax audit supposedly found out, through inquiries with the seller (I was neither informed nor questioned - so FBI method), that I was not even present at the purchase of the car - which could be completely refuted. However, the car was registered in my husband's name for insurance cost savings. The tax office was consulted by telephone in advance and approved it. The car purchase was completely processed through the business account, the invoice was issued to the company, and the sales contract also states the company. However, my husband signs this purchase contract on my behalf. The tax audit criticized this and did not want to recognize the car for tax purposes - it should remain in the business assets - that would be the compromise! They were willing to recognize the other expenses of the car. If I do not accept the compromise, I would have to refund the entire VAT, and the VAT paid on the sale would no longer be offset. Is that possible? They based their investigation on indications, but it could be proven that I did indeed buy the car for the company myself. Thank you in advance for the response.
Dear advice seeker,
First of all, thank you for your inquiry!
I would like to address your questions based on the situation you have described as follows:
In order for a vehicle to be recognized as a company car, it must be demonstrably incorporated into the company, with the VAT being accounted for in the purchase and sale. This usually happens when the vehicle is registered to the company (or to the company owner), the vehicle is paid for with company funds (although it is not mandatory, as there is also the possibility of transferring a previously privately used car into the company), and the costs such as acquisition costs and proceeds from a sale are considered in the VAT return (meaning that the VAT is either reclaimed or paid).
All of these requirements are met, except for the fact that the insurance is not in the name of the company or the company owner.
However, as correctly recognized by the tax office, this does not fundamentally prevent the vehicle from being recognized as a company car.
If I understand correctly, you are the owner of the company (if not, please let me know so I can address this in the follow-up question). The main issue regarding VAT seems to be that your husband signed the contract on your behalf.
However, this should not be to your disadvantage, as under a valid legal representation according to § 164 BGB, the representative is not obligated, but rather the represented party, which is you. Therefore, in tax terms, only the represented party is obligated.
If your husband signed the contract in his own name without indicating representation, and he, as a non-owner of the company, essentially purchased the company car privately, then the VAT should indeed not be considered.
Unfortunately, this is not entirely clear from your inquiry, as you mentioned that your husband signed the purchase contract on your behalf.
In conclusion, it should not make a difference whether the company owner signs the purchase contract themselves or is represented during the contract conclusion, as long as the representation is obvious to the other party involved in the contract (the seller of the car).
In light of this, I consider the tax audit's concerns to be unfounded, so you should inquire again if there might be another (possibly additional) reason.
If the tax audit continues to be uncooperative, you should consider hiring a local experienced tax advisor or a colleague with expertise in tax law to represent your legal interests.
I would like to point out the following:
The legal advice I have provided is based solely on the information you have provided. My response is only an initial legal assessment of the situation and cannot replace a comprehensive review of the facts.
By adding or omitting relevant information, a completely different legal assessment may result.
I hope that my explanations have been helpful to you. You are welcome to contact me through the follow-up option on this platform or via my email address.
I wish you a pleasant Saturday afternoon and a great weekend!
Sincerely,
Dipl.-jur. Danjel-Philippe Newerla, Attorney
Heilsbergerstr. 16
27580 Bremerhaven
kanzlei.newerla@web.de
Tel. 0471/3088132
