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Salary waiver for the use of a company car

April 3, 2016 | 50,00 EUR | answered by Steuerberater Udo Glinka

Dear Sir or Madam,

Since last year, my employer has provided me with a company car for both business and personal use, in exchange for a deduction of 5000 € from my annual bonus (specified in the car usage agreement).

In my monthly salary statement, the 1% rule and an additional 0.03% rule are used to calculate the taxable benefit. When filing my tax return, I continue to claim daily commute expenses as deductible business expenses.

I have the following questions regarding this situation:

- The deduction of 5000 € from my bonus was not taken into account when calculating the taxable benefit. Is this correct, or should my employer have considered this deduction?

- Is there another way to claim the salary sacrifice in addition to the daily commute expenses as deductible business expenses on my tax return?

Thank you in advance for your assistance in answering these questions.

Steuerberater Udo Glinka

Dear advice seeker,

based on the information provided to me, I would like to give you my assessment of your situation.

From what I understand, it is not so much a salary waiver, but rather a salary conversion. Instead of receiving the 5,000 EUR bonus, you receive the taxable benefit of using a company car, which is then gradually taxed instead of the bonus.

Since the 5,000 EUR do not represent an additional payment from your net salary, they cannot be credited towards the benefit of car usage.
Reference: BMF, letter dated 6.2.2009, IV C 5

Therefore, your employer's approach is correct so far.

Unfortunately, I do not see any other way to claim the 5,000 EUR (besides for commuting to/from work).

I hope that my explanation has been helpful to you.

Best regards,

Udo Glinka (Tax Advisor)