Income taxes when you have a company car

Today I heard from my employer that there were some legal changes with income taxes when you have a company car. How I understood it (and I don't know if that's exactly the case), is that when you have a company car, and you are in the office for more than 46 days a year (about 1 day a week), your distance between home and the office must be taxed. This comes down to a 0.03% per kilometer added to the 1% that is already added for the leasing.

Apparently there's something you can get at the Finanzamt so you can add this to your "Werbungskosten" at the end of the year. Does anyone know anything about this, and if so, did I understand this right?

Thanks

I don't know that there is a legal change - company cars are added to your taxable income as geldwerter Vorteil. See also: Dienstwagen


The geldwerter Vorteil is calculated to be 1% of list price each month (the fact leasing or otherwise is irrelevant to YOUR taxation). To this
0.03% per kilometer shortest distance between your place of work & your residence is added - again each month.

If you go into one of your company's offices less than about 1 day per week (and that is ANY office in Germany not just the one nearest to you) then the 0.03% per kilometer does not apply. Woe betide if you are found to be going into an office too often.

I am in this situation having a company car & working from home - with an addition to my contract that states this. Additionally I have to send in a form at the end of each month stating where I was each day to prove this...


You misunderstood. You cannot claim back tax levied due to your having a company car.

Just as with anyone who regularly commutes you can claim the Entfernungspauschale between home & office - starting at the 21st Kilometer. You can only do that for the days you actually travel. Hence if you have a company car & exceed the threshold you will be taxed as if you travel to office EACH day but can only claim Entfernungspauschal for the days you actually travel.

Motto of the story: know the rules.

Hi Folks,

I'm new to the site so don't hammer me for opening up with tax, I'm sure you're all bored of the subject! I've just been offered a job in Düsseldorf part of the package is a company car, does anyone know what the tax burden is. It seems that you have 1% of the list price deducted from your salary every month or you are taxed as if you are earning 1% of the list price, so the 1% is notionally added to you salary for tax purposes. Can anyone clarify? I'll try to be less dull second time out, but thanks for your help on this one.

Topics merged by admin

Following amounts will be notionally added to your monthly salary:
1. 1% of the list price of the car
2. 0.03 % of the list price of the car for each kilometre distance between your flat and workplace

Example:
list price of car: 30,000€

added to monthly salary:
300€...1% * 30,000€
20*9€...20 km distance
__________
480€

panda munich, thank you for the response, at the risk of sounding thick (something the wife thinks is a fact) do you mean they'll deduct €480 per month or the tax will be a proportion of the €480. Sorry to be picky just trying to get it clear in my mind.

no, €480 is the taxable benefit. You will pay whatever your personal tax rate is on the €480.

Example:
your simple gross monthly salary is: 5,000€

WITHOUT company car, your personal tax rate on 5,000€ could be, for example, 35%:
income tax: 0,35 * 5,000€= 1,750€
--> net salary you are paid (not taking into account other deductions like health insurance, unemployment, social, pension, church tax, etc.):
5,000€ - 1,750€ = 3,250€

WITH company car, notional gross monthly salary is: 5,480€
tax rate on 5,480€ is, for example, 38%:
income tax: 0,38 * 5,480€= 2,082.40€
--> net salary you are paid (not taking into account other deductions like health insurance, unemployment, social, pension, church tax, etc.):
5,000€ - 2,082.40€ = 2,917.60€