Ask a tax advisor on the topic of Profit and loss statement

Operating expenses when using the mother's car.

January 31, 2022 | 50,00 EUR | answered by Dipl.-Kfm. Frank-Olaf Illiges

Hello,

As a sole proprietor, I do not own a car and use my mother's car (her property, for private use) for traveling to my clients.

Question: Am I allowed to consider a self-determined flat rate per kilometer (€0.80/km) as operating expenses?

I can provide proof of my trips to clients by using my invoices with dates and addresses, as well as the calculated kilometers from the office to the client and back, which I track in an Excel spreadsheet.

This flat rate would cover all operating costs such as maintenance, insurance, depreciation, fuel, etc., so I would not need to consider any additional car-related expenses in my bookkeeping.

I would evaluate the total kilometers and costs monthly using my Excel spreadsheet and pay my mother the amount monthly. The Excel spreadsheet includes reference data for my customer invoices with addresses for the starting point and destination, as well as the driven kilometers.

In my bookkeeping, I would include the evaluations of each month and enter the total amount as a tax-free operating expense (both gross and net).

Thank you for your feedback.

Kind regards,
Uwe Weinreich

Dipl.-Kfm. Frank-Olaf Illiges

Dear Mr. Weinreich,

Thank you for your inquiry, which I am happy to answer taking into consideration your efforts and the rules of this platform.

The deduction of business expenses requires the entrepreneur to incur their own expenses. However, in the case of your mother's car, you have not incurred any costs. Both the purchase and the ongoing maintenance of the car were solely paid by your mother. Therefore, you cannot generally claim business expenses for the use of your mother's car.

The deduction of business expenses is only possible if you enter into a commercial lease agreement with your mother and pay rent to her. Your mother would then have to declare the rent as income from other services (§ 22 No. 3 EStG). Income from other services is tax-free if it is less than 256 EUR per year (exemption limit).

Sincerely,
Dipl.-Kfm. Frank-Olaf Illiges
Tax advisor
Ringstraße 98
33378 Rheda-Wiedenbrück

Phone: 05242/4055666
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e-mail: office@illiges-steuerberatung.de
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