Company car / Transfer of child allowance
March 4, 2012 | 30,00 EUR | answered by RAin/StBin Henriette Regulla-Schiessl
1) Company Car
I live about 30 km away from my workplace. I have been in a partnership for about 6 years. The distance from my partner's residence to her workplace is 363 km.
Since that time, the tax office recognizes the trips to my partner's residence as deductible business expenses. At the time of initially declaring these expenses, I cited the judgment of the Cologne Finance Court dated 24.10.2000, file number 8 K 7085/99 as justification. I was able to prove through various arguments (e.g. home office regulation) that the center of life is with her, even though the official registration still lists my original place of residence.
Since May 2010, I have been provided with a company car (also for private use) by my employer. The company only taxed the trips between my residence and the workplace as a taxable benefit at 0.03% and the new car value at 1%.
Now the tax office concludes that the trips to my partner with the company car (since May 2010) are not deductible, as the employer did not tax them as a taxable benefit (I assume following the 0.002% rule).
As one can see, there is no clear legal regulation underlying this. From my point of view, the most plausible model to apply would be the double household management. In this case, I believe that the 0.002% for the family trips should not be taxed, as the trips are deductible as business expenses (as they were regularly in previous years).
- Can I challenge this argumentation?
- Should the employer have always taxed the family trips as a taxable benefit?
- Can I ask the employer to retroactively tax the family trips and then submit them to ultimately claim them as business expenses? What would be the exact procedure?
2) Transfer of Child Allowance
My daughter lives in the same household and earns income from an apprenticeship. The mother does not live in the household. So far, the full child allowance has been transferred to me, as the mother does not pay any child support.
Now the tax office is of the opinion that probably (due to my daughter's income) the mother does not have an obligation to pay child support. Therefore, they claim that a transfer to me is not possible, which I find incomprehensible. Firstly, the circumstances have not changed in the assessment year compared to the previous year, and furthermore, I wonder why the mother can still claim an allowance despite (presumed) lack of child support obligation.
Thank you in advance for answering these questions.
Dear questioner,
Thank you for your inquiry, which I will answer in the context of an initial consultation, taking into account your input and the rules of this platform. The response is based on the information you provided. Adding, omitting, or changing information, ambiguities, or inaccuracies in the facts can alter the tax result.
I assume that you are referring to the income tax assessment 2010, as no specific details were provided.
1) Commuting Expenses
If you only commute home once a week (based on the distance), the free provision of a vehicle by your employer does not result in the calculation of the benefit-in-kind based on the 0.002% method (§ 8 para. 2 sentence 5 of the Income Tax Act). Additional trips will be calculated at 0.002% of the list price for each distance kilometer. So, if you only travel home once a week, you are correct. You can claim the advertising costs; there is no need for your employer to tax the benefit-in-kind.
2) Child Allowance
You did not provide the age of your child, so I do not know if your daughter is already of legal age. You are entitled to child benefit or child allowance if the child has reached the age of 18 and is in education. The income limit for your child (after deducting various amounts) is EUR 8,004 in 2010.
According to § 32 para. 6 sentence 6 of the Income Tax Act, at the request of one parent, the child allowances belonging to the other parent can be transferred to them if the requesting parent, but not the other parent, substantially fulfills their maintenance obligation to the child for the calendar year.
Transferring child allowances is only possible if both parents had a maintenance obligation during the assessment period. If one parent is not obliged to pay maintenance (due to lack of financial means), the child allowances cannot be transferred to the other parent.
For minor children, the process is simpler. The child allowance is transferred to the parent with whom the child is registered.
If your daughter is of legal age, the tax office may refuse to transfer the child allowance if the mother has no maintenance obligation.
Please note that from the assessment year 2012, transferring child allowances is also possible if the other parent is not financially capable of fulfilling the maintenance obligation to the child (amendment of § 32 para. 6 sentences 6 and 7 of the Income Tax Act by the Tax Simplification Act 2011 of November 1, 2011).
I hope this information is helpful to you.
Best regards,
Henriette Regulla
Attorney/ Tax Advisor/ Tax Office for Tax Law
