Ask a tax advisor on the topic of Other questions to tax advisors

Company car in a sole proprietorship

November 4, 2014 | 25,00 EUR | answered by Ralph J. Schnaars

I am employed and also have a sole proprietorship with an annual turnover of approximately 20,000 euros. I would like to purchase an electric car as a second vehicle and save costs by running the vehicle through my sole proprietorship. Is that possible? Will the tax office accept this? I don't really need to drive to my clients with the car. Using a logbook would not be an option.

Ralph J. Schnaars

Dear inquirer,

you are free to allocate your motor vehicles as you wish.

If you assign the vehicle to your business, the question remains whether it also applies for tax purposes.

In this case, a motor vehicle with a business usage of more than 50 percent is considered necessary business assets and therefore automatically assigned to the business.

For a business usage of 10 percent to 50 percent, you have the option to decide whether to assign the vehicle to the business.

And for a business usage of less than 10 percent, the vehicle is considered as private assets for tax purposes.

The determination of the usage shares is done by keeping a mileage log. This log should be kept for at least three, but preferably six months, in order to provide evidence of which category the vehicle belongs to.

However, if you assign the vehicle to the business, the question remains whether the taxable private usage portion (probably 1 percent of the gross list price) will end up costing more in taxes in the long run than the savings from deducting the vehicle. The future would need to be calculated on this matter.

I hope this information is helpful in your considerations.

Kind regards,

Ralph J. Schnaars

STWB Steuerberatungsgesellschaft mbH
Direct contact +49 (0)171 525 20 42
Email mail @ stwb-steuer.de