Tax tip: Using company cars correctly
Background: Company car for private use – what the tax office wants to know
What the Federal Fiscal Court (BFH) says
The BFH ruled on 18.06.2024 (case no. VIII R 32/20): Not every self-paid expense reduces the taxable benefit. Only certain costs are relevant and these are primarily fuel costs.
Example from practice:
An employee uses his company car for vacation trips. He pays tolls, ferries, parking tickets and even buys a bike rack for his car privately.
His idea: all these expenses should reduce the tax advantage from the 1% rule.
The tax office waves it away and the BFH agrees with him:
- Toll and ferry costs: Not deductible as they are purely private additional costs.
- Parking costs: Also not relevant, as they are not part of the standard use of the vehicle.
- Bicycle carrier (depreciation): Depreciation for privately purchased accessories does not reduce the tax advantage either.
Only the gasoline costs (fuel) paid by the employee may reduce the non-cash benefit from the private use of the company car.
Why is that?
The 1% rule is a flat rate for private use and covers certain costs. But only those that the employer would also bear if it provided the car in full. This includes fuel, as this is part of the use. Tolls, parking fees or accessories, on the other hand, are private extras that the tax office ignores.
Caution: The employer may not simply assume these costs either!
If your employer were to pay for your private parking tickets or toll costs, for example, this would be an additional non-cash benefit that would have to be taxed separately. These expenses are not covered by the 1% rule.
Recommendation for action:
- In principle, only fuel costs reduce the monetary benefit – tolls, parking fees, etc. are not taken into account.
- You should keep receipts for self-paid fuel costs so that you can declare them correctly.
- Tolls, ferries, parking or accessories are not taxed – no matter how high the costs are.
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