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Quite practical: company car in lockdown
Attorney Dominik Leiter gives useful legal tips for practice in the automotive industry. This time a tax tip: What to do if the company car is not actually used because you work from home?
Quite practical: company car in lockdown
A company car for private use is something pleasant for employees. Or as the lawyer would put it: The permitted private use of a company car represents a monetary benefit from the employment relationship. Accordingly, this benefit in kind must also be taken into account when calculating wage tax and social security contributions. So far, so fair. However, if the beautiful company car is mostly left lying around useless due to home office and lockdown, it will continue to be taken into account as a benefit in kind. Not quite so fair anymore.
Since no specific regulations have been introduced for the current situation and, as far as can be seen, this issue is not at the top of the government's agenda, we are looking at the possibilities for optimizing tax law based on the current legal situation: On the one hand, the amount of the benefit in kind is determined by the CO2 emissions value of the company car. In principle, it amounts to 2% of the actual purchase costs of the vehicle, but a maximum of 960 euros per month. In the case of a car with a low CO2 value, it is 1.5% and a maximum of 720 euros per month.v
Half the benefit in kind
On the other hand, the benefit in kind is based on the extent of private use. If the car can be proven not to be used more than 500 kilometers per month for private purposes on an annual average, half the benefit value in kind, i.e. either 1% or 0.75% of the actual purchase costs per month, must be applied. If private use is very low, the benefit in kind can be set at 0.67 or 0.50 euros per kilometer driven if this calculation results in the benefit in kind being valued as less than half of the half benefit in kind. Otherwise, half the benefit in kind value will be used. Based on the regulations presented, a reduction in the benefit in kind would be possible in the event of less private use. The biggest hurdle, however, will be the ability to prove the low usage through a complete logbook.
Alternatively, it may make sense to (temporarily) return the company car to the employer. We recommend returning the vehicle at the end of the month (including the handover protocol), otherwise the benefit in kind will still apply for the entire following month.