For sales representatives, there is an interesting extra to salary for qualified employees and an alternative to salary increases for employees who earn more and more: the company or company car. Who may use this not only for business trips, but also privately, must pay taxes on the resulting monetary benefit as a wage. I'll explain the possibilities with you here controls tips.de.
There are two alternatives for determining the taxable value in use: the flat-rate 1% scheme, which requires monthly taxation of one percent of the list price, as well as the proof method, which requires a logbook.
Which method is cheaper?
A logbook is especially cheaper if
- the company car is driven a little private;
- the total mileage is low in the year;
- the employee must bear operating costs such as fuel costs himself;
- the car has already been written off;
- the company car is a used vehicle.
The 1% method is cheaper if the company car is widely used for private driving.
Once the choice has been made for the respective vehicle, the employer is bound in that year. Only if a new vehicle is purchased, he can change the method during the year.
Many employers use the 1% method without taking the individual situation of the employee into account. The flat-rate method is also the simplest for the employee - but not always the cheapest. Which method is ultimately used to "drive better" for tax purposes must be calculated in individual cases. For the 1% method, our partner controls tips.de here free calculator to disposal. A logbook always leads to an individual calculation that can not be mapped in online computers.
Tip: If the method used by the employer is detrimental to the employer, the employer may switch to the tax-deductible method and thus reduce his taxable gross wages.
Correct the value in use in the tax return
The gross salary, as shown in the employment tax statement, also includes the taxable value in use for the benefit in kind »company car«. Employers with company cars should certify by the employer what the value in use taxed according to the lump-sum method. On an additional tax declaration form, this value is then deducted from the gross salary and the usage value calculated using the logbook is added.
The gross salary adjusted in this way is entered in Annex N. The tax declaration is enclosed with:
- the additional sheet,
- the calculation of the individual value in use,
- the certificate of the employer about the value in use and
- the total cost of the company car.
The logbook must be presented only if requested to do so by the tax office.
Of course you can also switch from the logbook method to the flat rate method, if this is cheaper.
1% method: Flat rate, but often unnecessarily expensive
Here, the value in use for private trips is taxed monthly and is 1% of the list price. Thus, 12% of the list price is taxed for the year.
The calculation parameter for the taxable value in use is the list price - which is only rarely likely to match the price actually paid by the employer for the vehicle. The "list price" is the non-binding price recommendation of the manufacturer for the vehicle at the time of its first registration. Decisive is the domestic list price, the price recommendation of the car manufacturer for the German market.
The gross list price for a new vehicle is also applied in full and not reduced if the actual purchase price is lower than the list price due to price reduction (dealer discount etc.) or due to price advantages when buying abroad. It includes VAT and the cost of optional equipment, including a factory-installed navigation device. The subsequent installation of additional equipment in a company car does not increase the list price.
The determined list price is rounded off to the full 100 Euro.
For driving from the apartment to the regular workplace with the company car, an additional value in use must be taxed. This can be determined by two different methods from which the employee may choose one:
- Flat rate (0,03%): For each kilometer of easy distance between home and regular place of work, 0,03% of the list price must be taxed monthly as the value in use. With this value round trip are compensated. Or
- Individual Assessment of Actual Rides: The value in use for regular trips for each trip actually performed is 0,002% of the list price per kilometer of easy distance between home and regular workplace. The individual rating is more favorable if the employee drives to the regular work place on less than 15 days per month and consequently in the annual tax return on less than 180 days a year.
This value in use is also added to the taxable wages of the employee.
Logbook: A lot of effort, but can be financially worthwhile
In this method, the taxable value in use must be the part of the total cost of the vehicle that corresponds to the share of private journeys and journeys made by the workplace to the total number of journeys. requirement is, that
- the total cost of the vehicle can be proved by supporting documents and
- a proper logbook is kept.
The »total costs« are the total for the company car expenses incurred by the employer. Costs borne by the employee, for example for gasoline, are not included in the total costs.
The employee thus requires proof of the vehicle costs from the employer in this method. Not every employer will be enthusiastic about the additional bureaucracy involved in this cost allocation. In principle, however, he is obliged to provide this information under employment law, insofar as he is not excessively burdened and reasonable. The total cost includes only those costs that are directly related to the maintenance and operation of the vehicle and that are inevitably incurred in connection with its use. This includes:
- Operating costs related to VAT, such as petrol, oil, tires, vehicle maintenance, repairs, inspections
- Operating costs that are not subject to sales tax, such as vehicle tax, liability and vehicle insurance
Order has to be!
Recordings in the logbook show the share of private journeys and journeys between home and regular place of work in terms of total mileage. This information is required in the logbook:
For official journeys:
- Date and mileage at the beginning and at the end of each individual job-related external activity,
- Destination and if detours also the itinerary,
- Travel purpose and visited business partners.
For private journeys, it is sufficient to indicate the number of kilometers driven.
For journeys apartment work place is sufficient in each case a short note with indication of the respective driven kilometers.
The logbook must be kept up-to-date and complete, and the entries must be made promptly.
Also important: The logbook must be kept in a closed form - paper economy or a logbook created with Excel will not be accepted. The reason: The logbook should be no subsequent changes and entries can be performed.
Since the exact values of the detection method are not known until the end of the year, the employer first provisionally calculates the monthly value in use, namely one twelfth of the previous year's amount. Alternatively, he can tax every privately driven kilometer with 0,001% of the list price. At the end of the year, the actual value in use is determined exactly. If the employment ends in the course of the year, it will be settled at this time.
For the journeys Flat-regular work place with the company car the actual carried out journeys are taxed with the proof method as monetary value advantage, in the amount of the actual kilometer cost rate.
Leasing vehicle as a company car
Even if the company car is leased by the employer, the value in use must be determined and taxed as with a purchased vehicle.
In the case of the detection method, the current lease payments are generally included in the total costs instead of depreciation. A leasing special payment at the beginning of the lease is included in the full amount of the total cost in the year of payment.
This fact can be used as an interesting tax-saving model for leasing vehicles: The employer agrees with the lessor the highest possible special payment and correspondingly low leasing rates. In his tax declaration, the employee calculates and taxes the private value in use in the year with the high leasing special payment according to the lump-sum method and switches to the proof method for the years thereafter. Here, the value in use is reduced at low leasing rates, while in the flat rate method it is unaffected by the amount of the special payment. Such a change of methods is permitted; it may only be changed during the calendar year.
Another alleged tax-saving model recommends splitting a lease into two separate contracts. The employer concludes a leasing agreement on occupational use and the employee enters into a contract of private use. However, the tax administration does not recognize these two-contract models.