Frankfurt The path to work is currently very short for many workers: from the bedroom to the living room or study – and there they are. Even more than three months after the outbreak of the corona pandemic in Germany, many employees still work predominantly in their home office. If you have a company car, you hardly need it, because in addition to the way to work, trips to customers and business partners are also eliminated. Expenditure on the vehicle continues, however, and tax law has so far offered little flexibility.
The Federation of Taxpayers (BdSt) has therefore been demanding relief for employees for a long time. “It’s good and right that companies receive state support in the corona crisis, but so far workers have been neglected,” says Isabel Klocke from the BdSt.
The Federal Ministry of Finance (BMF) has already taken the first measures, for example special payments up to an amount of EUR 1,500 remain tax-free. So far, there is no decision regarding the company car. After all, a bit of leeway in the company car can offer an administrative instruction from the BMF from 2018.
Basically, the taxation of a company car works like this: Anyone who can also use the car privately must tax this privilege as a so-called monetary benefit. There are basically two methods for this: the one percent rule and the logbook. In the case of the former, one percent of the domestic gross list price per month must be taxed at a flat rate at the time of the first registration. With the logbook method, each trip is documented individually and marked as professional or private. In this way it can be determined how high the private share of the total costs for the car is.
At first glance, those drivers who keep a logbook seem to have an advantage during the Corona restrictions. Finally, they can clearly demonstrate that they have only been on the road a little. But it’s not that easy.
Rule of thumb for the cheaper method
If the vehicle was moved less overall, the proportion of private trips could currently be higher than in the past. At the same time, the total costs decrease less because, in addition to the variable fuel costs, they primarily include fixed costs for insurance, maintenance and depreciation – with which the company records the annual impairment of the car. Depending on the individual use of the vehicle, employees with a logbook are currently facing a higher tax burden.
Markus Deutsch, tax lawyer from Berlin and vice president of the Berlin-Brandenburg tax advisers association, puts it this way: “Which method is cheaper depends on the individual case, but as a rule of thumb: the higher the quality of the car and the larger the proportion of business trips, the more a logbook is more worthwhile. ”Experience has shown that the proportion of private trips should be less than 50 percent.
The actual use of the car is irrelevant to the one percent rule. Per month, the employee is credited with one percent of the gross list price as a non-cash benefit. There are also journeys between home and the first place of work. Here, a flat rate of 0.03 percent of the list price is booked as a monthly benefit per distance kilometer – i.e. for a one-way trip. This happens regardless of how often employees actually travel this route.
To compensate for this, however, the distance flat rate can be set in the tax return. In addition, 30 cents can be claimed as advertising costs to reduce the tax per distance traveled. Problem in the corona crisis: If employees drive to work less often, this flat-rate allowance is also reduced.
According to tax expert Klocke, a legal regulation would be required as compensation. “For the months when the contact restrictions were particularly strict, the percentage of private use should be reduced from one percent to a lower value,” she says. “After all, the citizens were advised not to leave their homes if possible and could use their company car less.”
BMF rule offers relief
A relief could also provide some employees with an individual assessment of the actual trips, which the BMF describes in an administrative instruction from April 2018. Accordingly, it may be permissible to tax only the actual journeys between the home and the first place of work per kilometer at 0.002 percent of the list price.
This is possible if the employee has traveled to work a maximum of 180 times in a calendar year. He then has to explain to his employer in writing on which specific days he used the car to drive to work – on this basis, the monetary benefit and the income tax deduction are calculated.
It is not possible to switch from the flat-rate 0.03 to the 0.002 percent calculation in the current year. However, the rare trips can be taken into account in the tax return for 2020. “Employees have to tell the tax office for the entire year on which specific days they went to the office,” says tax advisor Deutsch. They must also demonstrate that the employer actually taxed the monthly flat rate of 0.03 percent of the list price.
It is not possible to switch from the one percent rule to the logbook during the year. If an employee kept a logbook from the beginning of the year while his employer taxed the monetary benefit using a one percent rule, he could claim his logbook calculations in the next tax return.
To do this, however, he must know the total annual costs for his company car. “Depending on the company, this information can be difficult to obtain,” says Deutsch. In addition, the tax office places high demands on a logbook. For electronic variants, for example, it is important that information cannot be changed afterwards. Regardless of Corona, company car drivers have to consider a few things.
More: Read everything else about tax returns in our 41-page advisory dossier – with tips for employees, for families, students, property owners, investors and pensioners.