Company car stolen in 2010
September 19, 2011 | 30,00 EUR | answered by StB Manuela Ponikwar
I am an architect (one-man-show, no employees) and have been doing my relatively straightforward tax return myself for many years, but I am not sure how to proceed in this situation. Last year, my company car was stolen and never recovered. However, since I was insured against theft, I received the money back from the insurance company. How do I account for this in terms of income and expenses in general or in the "Anlage AVEÜR 2010" in particular? I had originally paid 24,500, of which 7%, or 1,602.80, was shown as VAT. The car was worth 20,035 euros at the beginning of the accounting period, on 01.01.2010. It was stolen on 19.02 and at that time, its value for depreciation purposes was 19,521 euros. I probably need to enter this value in the column "Book value at the end of the accounting period," right? I received 21,850 euros from the insurance company, but there was no VAT listed in the payment. Am I correct in thinking that I have essentially made a profit of 2,329 euros (21,850 - 19,521) that I need to pay taxes on?
Dear inquirer,
Thank you for your inquiry, which I would like to answer as part of an initial consultation considering the appropriate fee as follows:
You had the vehicle in your business assets and presumably taxed the private use through the 1% rule. In this respect, it was a vehicle used for both business and personal purposes.
A. Principle:
The belonging of the stolen asset to the business assets does not necessarily indicate the business-related cause of the loss (due to accident, destruction, or theft).
According to various Federal Fiscal Court rulings, it is necessary that the loss is almost exclusively caused by business reasons and not significantly influenced by the taxpayer's private actions.
B. Loss during private use:
A benefit in kind is present in the amount of the remaining book value. This benefit in kind (income) neutralizes the written off remaining book value (expense). As a result, the loss of the vehicle is not relevant for tax purposes.
Insurance reimbursement only represents a business income to the extent that it exceeds the remaining book value of the vehicle.
C. Loss during business use:
If a mixed-use company car is stolen, the full reimbursement from the comprehensive insurance leads to a business income if the theft occurred during a business trip.
In contrast, the remaining book value of a vehicle stolen during a business trip must be fully written off as an expense.
D. Replacement procurement reserve:
In balance, there is a theoretical profit of 2,329 EUR (= hidden reserve), which you can set up as a replacement procurement reserve and transfer it to a replacement asset. If the loss occurred in 2010, you have until December 31, 2011 to procure a replacement and transfer the hidden reserve.
This is usually for balance sheet accountants, but the reserve is also applied for income-surplus calculation. If there is no replacement procurement by the end of 2010, you include the reserve in line 73 (field 187) of the income-surplus calculation. If directly transferred to a new car (replacement procurement within 2010), the amount goes to line 74 (field 170). The sum then appears in line 46 as an expense, neutralizing the compensation income (line 12).
E. Presentation in Anlage AVEÜR:
As the vehicle left your company during 2010, you must record the remaining book value of the vehicle as a disposal. So, you include the depreciation until February 19, and then the remaining book value of 19,521 EUR as a disposal. The book value at the end is 0.
F. Value Added Tax:
Real compensation is not subject to value-added tax, as there is no exchange of services.
However, this does not mean that the insurance reimbursement does not cover the complete replacement value of the car including value-added tax, as according to §249 BGB, compensation must include the value-added tax if it has actually been incurred.
I hope this information is helpful.
Best regards,
Manuela Ponikwar
Tax Advisor
www.ponikwar.de
