Income taxes when you have a company car

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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 :)

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Today I heard from my employer that there were some legal changes with income taxes when you have a company car.

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

 

 

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.

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...

 

 

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?

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.

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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.

 

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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€

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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.

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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€

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I understand the 1% of value,etc being added to salary for taxable purposes. But what about the lease rate itself ie if the lease costs 600euros/month then is this also added to the gross for taxation? (and then deducted of course immediately as payment to lease?

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But what about the lease rate itself ie if the lease costs 600euros/month then is this also added to the gross for taxation? (and then deducted of course immediately as payment to lease?

No

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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.

The 21km threshold has been held to be unconstitutional by the Bundesverfassungsgericht on December 9th. You can claim the Entfernungspauschale for the whole distance again (this includes the tax years 2007 and 2008).

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sorry to sound daft, but Entfernungspauschale, can somebody explain how this works?

 

I am moving to germany soon and willhave a company car, work in the office 2-3 days a week and commute about 80km

 

so i'll pay tax on 1% of the list price, and 0.03% perkm for my commmute then Entfernungspauschale is a tax refund?

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I'm having problems understanding this geldwerter Vorteil bit for the company car. If, say, we have a geldwerter Vorteil of 500 EUR per month, we are then taxed on that 500 euros (I believe). Is unemployment insurance and state pension also deducted from this 500 EUR?

 

Thanks for your help

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How does it work with the private use of company car? Is there additional tax or regulation?

 

I plan on getting a company car but the private use will account for 80-90 % of the usage.

 

I looked at a few links and it was cited that additional 0.002% is added per km when privately used> This can add quite a bit if you are using it for private purposes mostly ( i.e 20 K car value; 20K km per year private use, it adds up to about 700 EU per month additional taxable income)

 

Is this the case? or the 1% +0.03% is all that will be deducted without considering the private use?

 

here is the link I looked at - http://www.working-in-germany.com/company-car-0120.html

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Is this the case? or the 1% +0.03% is all that will be deducted without considering the private use?

That is the consideration of the private usage.

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One more question. How it works with the 46 days trhreshold. If i well understood, the 0,03% is not requested if a person works in any office in germany less than 46 days / year. Is this still valid now? Do I pay the 0,03% and then claim back the taxes with the fiscal declaration or directly I do not pay the 0,03%? Also what do I have to provide to my company or Finanzamt? If possible, can somebody tell me any law / regulation to be quoted to my company (my Personalabteilung doesn't know anyhting about that).

 

Any help is very high appreciated

 

Thanks

 

Roberto

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Your best bet is to talk to other colleagues in the same situation - they'll have worked out how to minimise their costs.

 

I know in my husband's situation - car is a perk rather than necessary for his job - it's important that his company recognises that he works from home and has a designated 'home office'. He's not here to ask at the moment but from memory the setting up of this had an immediate effect on his take home pay - in a positive direction.

 

D

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Hey thanks a lot for the answer. Actually I already tried to ask the collegues who have a company car, but it seems that they all live very close and therefore do not have high taxes to be paid. Somebody else can help, who is in the same situation?

Thanks

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Just want to add that in my case I do not need to set up an "home office" as I am really not in the opffice more than 46 days / year due to business trips... Thanks

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