Commercial leasing for small business owners
February 25, 2012 | 30,00 EUR | answered by Dr. Yanqiong Bolik
Dear Sir or Madam,
I have the following question: Can my wife, who has a small business as a hobby (buying and selling toys with a turnover of approximately €1000 per month and is not subject to VAT), lease a car for her 'activity' commercially? And can these leasing fees then be tax deductible? Currently, my wife's small business income is jointed with my relatively high employee income for tax purposes.
Kind regards,
Lupo555
Dear inquirer,
Thank you for your inquiry, which I will gladly answer taking into account your input and the rules of this platform.
Please note that my explanation is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of information can change the tax result.
If your wife needs a car for her small business, she can acquire a vehicle through leasing. The maintenance of the leased vehicle is business-related. The resulting leasing fees are deductible as business expenses in determining profits. If your wife also uses the leased vehicle for personal purposes, the allocation of the leased vehicle to business assets is only possible if the business use is at least 10% of the total use. The private use of the vehicle is subject to taxation either through the 1% rule or the mileage log method.
Regarding hobby activities, please note that your wife's small business should be operated with the intention of making a profit. Without the intention of making a profit, an activity is considered a hobby by the tax authorities and is generally not relevant for tax purposes. This means that the expenses or losses cannot reduce income (even in joint assessment) according to § 12 No. 1 EStG.
I hope I was able to assist you.
If there are any further questions, please feel free to use the follow-up function.
Best regards,
Dr. Yanqiong Bolik
Tax consultant
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 2132 1815
Email: steuer@zdbz.de
www.steuerberatung.zdbz.de
