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Is a car tax deductable?

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Liebe Toytowners!

 

I'm thinking of buying a car. I'm a freelancer which means that I can claim a lot of things as business expenses. Would a car qualify as a business expense for a freelancer? I was also thinking of financing it over a few years from a car dealership...would it then qualify if I make monthly repayments? I know I can claim 0.30€ per kilometer travel to work, but I'm unsure about the actual vehicle and petrol.

 

Many thanks :)

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There are two alternatives:

 

Alternative 1: You buy the car as a private person

You then claim 0.30€ per km driven for your business (keep records of these trips as proof!).

This solution is usually best if you have a used car.

 

Alternative 2: You buy a car as a business person.

The car will then belong to your business, which means that all costs associated that car will be business expenses. However, there's a downside.

 

Alternative 2a: Fahrtenbuch

You will have to keep gapless Fahrtenbuch (a paper one is best , since it's tamper-proof and easiest to keep) as proof that you only used that car for business purposes. The Finanzamt usually only accepts business-only use if you have a second private car or public transport tickets to show.

If you do also use the car for private purposes (but business use had to be more than 50%!) and keep a gapless Fahrtenbuch, then you will have to tax that percentage of its cost and depreciation (plus 19% VAT) as a "unentgeltliche Wertabgabe", i.e. as "income", and pay the VAT due to the Finanzamt.

For an example please see here: https://www.haufe.de/finance/buchfuehrung-kontierung/fahrtenbuch-bei-steuerpflichtigen-umsaetzen_186_263524.html

 

Alternative 2b: 1%

If you do not keep a Fahrtenbuch (but they will oblige you to keep one for the first 6 months as proof that you really use it for more than 50% for your business!) you will have to tax 1% a month of the car's Bruttolistenpreis (gross list price of that car model, i.e. including VAT. And no, that's not the price you paid, it's a purely theoretical higher list price that nobody ever pays), plus 19% VAT (but only on 0.8 * 1% * gross_list_price). Plus you have to tax as income every month 0.03% * gross_list_price * simple_distance_home_workplace (and yes, also pay VAT on that). 

For an example please see here: https://www.haufe.de/finance/buchfuehrung-kontierung/1-methode-bei-umsatzsteuerpflichtigem-unternehmer_186_265322.html

 

Alternative 2 is usually better if you buy a new car.

Alternative 2a is more advantageous in most cases, but you have to disciplined enough to keep that gapless Fahrtenbuch.

Alternative 2b is better if you buy an oldtimer (car that is older than 30 years) with a very low historical list price (think 6.000 DM list price), see here.

 

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Greetings 

 

Im about to do the tax return for 2022 in Elster (Using the Wiki of course)

Just a quick question if I may regarding legitimate car expenses.

My wife is a teacher and uses the car daily to commute to work. The car is a lease. In December we serviced the car (obligatory 12 month service as new in 2021)

Rather than simply calculating the expense based on 0.30  per Kilometre, it might be worth our while to calculate manually, given the high cost of fuel and the service fee (If this is tax deductible!)

From what I remember from last year the expense can be calculated ONLY for the drive to work and not the return, is this correct?  Regarding other relatable expenses which I can claim against- Can I include Fuel (calculated in relation to the number of Kms for the commute)? Service and Repair costs? Insurance payments? Leasing cost per month? The initial one time payment of 700 when the lease was taken out? And any other related expenses I might be missing out on?

 

I appreciate any insights the community my have

 

Warm regards

 

LittleWolfie

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4 minutes ago, snowingagain said:

Thought it was a commuting allowance, nothing to do with how you get to work, even if you walk?

You mean the 0.3 Euro per Kilometre?

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Yes, that is correct.

 

I am looking at it from the point of view that if we perhaps exceeded the 4500 costs per year in our own personal vehicle, then what expenses can I take into account and does this work also for a lease (To be honest, we  may not even come close to the 4500, I need to crunch the numbers but would be good to know what expenses I can use besides fuel costs

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1 hour ago, LittleWolfie said:

Rather than simply calculating the expense based on 0.30  per Kilometre, it might be worth our while to calculate manually, given the high cost of fuel and the service fee (If this is tax deductible!)

Short answer: not possible, employees have to use the 0.30€ per km flat rate and are only allowed to claim for the simple distance (= way to work, not back again home).
Just search for the word "tatsächlich" in §9 EStG, and you will see that the commute (= Fahrten zwischen Wohnung und erster Tätigkeitsstätte) does not have a "tatsächliche Aufwendungen" (= real costs) option attached to it.

 

Long answer: an employee claiming the real car costs for the commute is only possible if that employee is disabled (though most disabled people just choose to use 2*simple_distance*0.30€/km flat rate. Since they are disabled, they also get to claim for the way back, i.e. "work" to "home"), see §9 (2) Satz 3 EStG: https://dejure.org/gesetze/EStG/9.html

  • 3People with disabilities,
    1. whose degree of disability is at least 70,
    2. whose degree of disability is less than 70 but at least 50 and whose mobility in road traffic is significantly impaired,
    may deduct the actual expenses for the journeys between home and the first place of work and for journeys home to visit the family, instead of the flat rate for distances.

Here is an article with many, many examples: https://www.smartsteuer.de/online/lexikon/e/entfernungspauschale/

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