How does the tax treatment of company cars work?
May 16, 2022 | 40,00 EUR | answered by Ulrike Voss
Dear Sir or Madam,
I have a question regarding the tax treatment of company cars. I am an employee in a company and have been provided with a company car. So far, only a flat monthly tax has been deducted from me, but now I have concerns about whether this approach is correct.
My company car is used for both business and private trips. I have heard that the tax treatment of company cars can be very complex and I want to make sure that I do not make any mistakes and avoid tax payments.
Could you please explain to me how the tax treatment of company cars generally works? Are there differences depending on the type of vehicle (e.g. electric car, diesel, petrol)? What tax advantages or disadvantages arise for me as a user of a company car?
I am unsure whether the current flat taxation of my company car is correct and what options there are to optimize the tax burden. Could you show me possible solutions to optimize my tax situation with the company car?
Thank you in advance for your help and advice.
Yours sincerely,
Adele Weber
Dear Mrs. Weber,
Thank you for your inquiry regarding the tax treatment of company cars. It is understandable that you are concerned about the correct taxation and would like to consider possible tax advantages or disadvantages. I am happy to explain to you the fundamental aspects of the tax treatment of company cars and possible optimization options.
In general, the use of a company car for business and private trips is tax relevant. Taxation is usually carried out either according to the 1% rule or the mileage log method. Under the 1% rule, 1% of the gross list price of the vehicle is credited monthly as a taxable benefit to the employee's taxable income. With the mileage log method, the actual costs for the business use of the vehicle are recorded and taxed.
The type of vehicle, whether it is a diesel, gasoline, or electric car, can affect the tax treatment. Electric cars are currently tax-favored because they typically have lower CO2 emissions and can therefore offer tax advantages. Diesel vehicles, on the other hand, can be taxed higher due to higher pollutant emissions.
Regarding your previous flat-rate taxation of the company car, it is important to check if this has been done correctly. It may be advisable to create a detailed breakdown of the business and private use of the vehicle and submit this information to the tax office. This way, a more accurate tax calculation can be made and potential tax advantages can be utilized.
To optimize your tax situation with the company car, I recommend seeking professional support from a tax advisor or a specialist in tax law. They can show you individual solutions and support you in optimizing your tax burden.
I hope this information is helpful to you and I am available for further questions. Thank you for your trust and inquiry.
Best regards,
Ulrike Voss
