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Company car 1 percent rule when changing employers from GmbH to holding company - different location

March 10, 2020 | 25,00 EUR | answered by Steuerberater Knut Christiansen

Dear Sir or Madam,

I am currently employed at a GmbH based in Munich. Starting from 01.05.2020, I have signed a new employment contract with the holding company of this GmbH (in Nuremberg). I will also be provided with a company car (1% + 0.03% rule) from 01.04.2020 onwards.

My current place of residence is located 15 km away from Munich. I am expected to work predominantly (at least two days a week) at the Munich location this year in order to transition my current position to my successor. From 2021 onwards, I will be exclusively based in Nuremberg and will relocate my residence there.

The question now is whether, from a tax perspective, it is possible to designate the GmbH in Munich as my primary place of work for the duration of my employment in Munich in 2020 (or explicitly not designate a primary place of work: "e.g.: the organizational assignment shall not establish a primary place of work...", and if so, what wording needs to be included in the employment contract.

This would mean that in 2020, I would be taxed for the company car (€60,000) at a rate of = €600 + €247.50 (0.03% for 15 km distance) per month. From 2021 onwards, there would be no more work in Munich and I would be taxed for the distance from the new residence in Nuremberg to the job location in Nuremberg.

I want to avoid the tax office assuming that in 2020, I regularly commuted from Munich to Nuremberg with the company car = €600 + €3,333 (0.03% for 202 km distance).

I would appreciate your advice on the most appropriate course of action from a tax perspective based on the situation described, and any necessary wordings that may need to be included in the contract.

Thank you in advance for your assistance.

Best regards,

K. Schneider

Steuerberater Knut Christiansen

Hello and thank you for using frag-einen.com!

I would like to answer your question as part of an initial consultation and taking into account the fee that is charged, of which only 50% goes to me as compensation.

In general, it should be determined where your primary workplace is, as it is apparent that there is no exclusive work away from home and you visit one or more locations regularly. If your employer agrees, they should specify the location in Munich as your primary workplace in the employment contract. If you then work in Nuremberg, there would be travel expenses, but they would not be affected by the 0.03% method.

If the employer insists that your primary workplace is in Nuremberg, they could offer to tax the journeys at a flat rate and cover the tax. Alternatively, you can agree with your employer to individually evaluate the journeys. In this case, only 0.002% must be applied per journey to Nuremberg (max. 15 journeys = 15 x 0.002% = 0.03%). You would need to provide the employer with a monthly list of the dates of each journey (signed), which they must include in the payroll records.

Overall, it would be best for you if your employer assigns Munich as your primary workplace until you move to Nuremberg.

I hope this answers your question, if not, please feel free to ask any further questions.

I would like to remind you that this forum cannot replace a comprehensive and personal tax consultation, but is mainly intended to provide an initial tax assessment. By adding or omitting relevant information, the legal assessment of your issue could differ.

Best regards,

Knut Christiansen
Tax Advisor