Company car
June 9, 2009 | 30,00 EUR | answered by FP Fischer Robert Fischer
Dear Sir or Madam,
I will soon be receiving a company car and need to decide whether to choose the lump-sum taxation or individual taxation. Can you please provide a recommendation based on my data?
Gross salary: 57,000?
Gross list price: 31,700?
Distance between home and work: 44km (shortest route) or 69km (fastest route)
Monetary benefit: 735? (317.00? -> 1% of list price + 418.44 -> 0.03% * 44 km * 31,700)
Monthly payment to the company: 313?
=> monetary benefit: 422.44?
What tax burdens will I face with lump-sum and individual taxation?
Which distance option to work is the most cost-effective for me?
Do I need to keep a logbook for individual taxation?
Just to note: Apart from the commute to work, I don't have much to deduct.
Best regards,
Dear questioner,
based on the formulated question and the given circumstances, I can answer your question as follows:
The employee generally has the choice of whether to tax the private use flat-rate - according to the 1% method - or with a mileage log. This choice can be made anew each year.
Taxation according to the 1% method:
If the employee decides on the flat-rate taxation, the employer sets the value of private use at 1% of the domestic gross list price at the time of its initial registration plus the costs for special equipment per month (§ 8 para. 2 sentence 2 EStG). In addition to the taxation based on the list price, 0.03% of the list price per distance kilometer for trips between home and work is taxed per month. You have already calculated this option, so in your case this results in a taxable amount (monetary benefit of 735 € per month. The tax on this can be estimated at 45% (including solidarity surcharge) and is therefore approximately 330.75 €.
Taxation according to the mileage log method:
When taxing based on the mileage log method, the value of private use is based on the actual expenses incurred, if this can be proven by receipts and a proper mileage log.
For tax calculation, the cost per kilometer is first determined, which results from the mileage and total costs. This rate is the basis for calculating the monetary benefit for private trips. The total costs also include the depreciation or lease payments for the car. All values are to be calculated gross, including value added tax.
A precise calculation is unfortunately not possible with the information you have provided, as the total kilometers for the year, as well as the respective professional and private shares and the ongoing costs of the car would need to be known (or estimated). However, for your own calculations, please find the following hints for calculation
The following calculation then results:
- Percentage of private trips = Private trips / Total mileage
- Monetary benefit for private trips = Total vehicle costs x Percentage of private trips
- Percentage of trips to work = Annual commuting kilometers / Total mileage
- Monetary benefit for trips to work = Total vehicle costs x Percentage of trips to work
You then multiply this monetary benefit again by the tax rate of approximately 45% and thus determine the expected tax burden.
However, the monetary benefit calculated based on the mileage log is generally lower if
- the total mileage for the year is low,
- the proportion of private trips is relatively low,
- the list price including extras is high,
- the distance between home and work is far,
- the car has already been depreciated or a used car is being driven.
I hope this information has been helpful to you. If you need further advice, I am happy to assist.
Kind regards
FP Fischer & Pützer Steuerberater
by:
Robert Fischer
Dipl.-Betriebswirt (BA)
Tax consultant
Sommerstr. 19
83253 Rimsting
Tel.: 08051/6404105
