company car
January 18, 2017 | 30,00 EUR | answered by Steuerberater Udo Glinka
Dear Sir or Madam,
I intend to work as a freelance trainer, coach, and mediator starting from 01.02.2017 and have accordingly applied for this with the tax office.
Here is my question:
I own a private car with a first registration in 05/2015 and a list price of 51,000 euros, which I purchased for 29,500 euros on 01.10.2016. I am aware that I can also bill this at 30 cents per kilometer.
a) If I now use this as a company car, do I write off the 51,000 or the 29,500 over 6 years?
b) The depreciation alone would already be higher than the 1% rule. Therefore, all further expenses would be tax-deductible and it would definitely be worthwhile. Do you see it the same way or am I missing something? (Apartment is also the company's registered office)
c) What happens if I end my freelance activity? Do I then have to buy out the vehicle from a tax perspective or something similar?
Thank you for your answers.
Dear questioner,
based on the information you provided, I will answer your inquiry as follows.
Firstly, some basic statements:
- You are only eligible to claim the flat-rate allowance for business use as long as the business use does not exceed 50%.
- For business use below 10%, only the flat-rate allowances can be claimed.
- The 1% rule can only be applied if the business use exceeds 50%.
- The percentage of business use can be proven, for example, through a logbook over a representative period (3 months).
Regarding your questions:
a) You can depreciate the acquisition costs of 29,500 EUR at most. According to the official depreciation table, the useful life for a new car is 6 years (72 months). For older vehicles, the useful life can be reduced accordingly. Therefore, since the vehicle was already 21 months old at the start of self-employment, you can depreciate the vehicle over 51 months from 01.02.2017, which equals approximately 578 EUR per month.
b) The 1% rule is calculated based on the gross list price. Assuming a price of 51,000 EUR, this would amount to 6,120 EUR per year. The depreciation alone would exceed this value in a day. Any further expenses would have a tax impact. This situation would change once the vehicle is fully depreciated.
c) When ceasing the activity, you must remove the car at its current value and pay taxes on any profit. Essentially, this is exactly what you described.
Since you did not mention a turnover tax liability and an explanation of this would go beyond the scope, I have not addressed this.
I hope I could assist you.
Best regards,
Udo Glinka (Tax Consultant)
