Special depreciation for motor vehicles or depreciation after a decrease in profit due to illness.
June 23, 2020 | 50,00 EUR | answered by Steuerberater Knut Christiansen
Hello Mr. Christiansen,
I have some questions regarding the company vehicle again.
In May 2019, I purchased a Jimny GJ (€23900) and use it exclusively for business trips, so more than 90% of the time.
Of course, I keep a logbook.
For my private trips, I have a Toyota LC and additionally, for city trips, I use my wife's old car, for which I pay taxes and insurance.
My wife has her own car.
1. Should I also re-register my wife's old car under my name to prove that I have three cars?
2. Due to Corona, there will be little work for an on-site trainer/consultant in 2020.
Furthermore, I am seriously ill and will not be taking on any more assignments until early December of this year (2020).
However, I plan to claim special depreciation and regular depreciation for the company vehicle in 2020.
Is it possible to do this with only a few (around 1200) kilometers driven for business purposes?
3. And the most important question:
If my illness does not improve by mid-2021, I will have to give up my self-employment or limit myself to activities in my own office.
This means there will be no significant business trips with the Jimny anymore.
How will the company car affect my taxes then? Can I continue to depreciate it, even though there are only a few kilometers driven and the business profit is also minimal?
Can I turn the company car back into a privately used vehicle after 2.5-3 years?
Will the remaining value be considered as profit?
If I sell the Jimny, how will the proceeds affect my income statement?
Best regards,
Hello and thank you for your request on frag-einen.com!
I would like to answer your questions as follows:
1) If you keep a proper mileage log, it is not necessary to register the vehicle of your wife in your name. The private usage portion, even if minimal, can be accurately determined through the mileage log.
2) If the business usage in the year of purchase and the following year is over 90%, a special depreciation is allowed. You can claim "normal" depreciation if the vehicle is used for at least 10% for business purposes. It ultimately depends on the annual mileage and how many kilometers are driven for business purposes.
3) If the business usage falls below 10%, the vehicle would become necessary private property. You would then have to remove the vehicle from business assets at its fair market value. If the business usage is between 10% and 50%, you can decide if removing it from business assets makes sense from a tax perspective. Removing it from business assets can result in a book gain if the fair market value is higher than the tax book value. Due to special depreciation and normal depreciation, gains from removals often occur. If the business usage is less than 50%, you can make the vehicle your personal vehicle at any time. This would result in a mentioned "fictional" gain. Similarly, a gain would occur if you sell the vehicle. In this case, there would typically be a book gain as the selling price is higher than the book value, resulting in an increase in profit in your income statement.
I hope this answers your questions, if not, feel free to contact me again. Otherwise, I wish you all the best and a speedy recovery!
Best regards,
Knut Christiansen
