Save taxes when buying a car – What applies to a company car?
Created: 01/28/2022, 09:21 am
Entrepreneurs who want to deduct their company car from tax must use at least 90 percent of it for business © Rene Traut/Imago
If you buy a company car now, you can benefit from discounts.
Find out here what you have to consider when paying taxes.
A vehicle is a cost-intensive investment for every entrepreneur, but it is often unavoidable.
It's a good thing that the legislature has created opportunities to
claim your company car for tax purposes
and thus minimize the costs.
How does the purchase of a vehicle affect the tax?
If you buy a company car for your business, you cannot immediately
deduct the full acquisition costs from your taxes as a business expense
.
Only depreciation affects profit.
The acquisition costs are distributed over what is known as the normal useful life – for a car this is usually six years or 72 months, starting on the date of purchase.
This means that if someone only decides to buy a car* in June 2022, their depreciation will end in May 2028, in contrast to entrepreneurs who start work in January 2022 and then “fulfil” their six years in December 2027.
Also read:
New cars 2022: Many SUVs and even more electric cars.
Saving taxes: the investment deduction amount
A company owner can already claim part of the acquisition costs as
operating expenses
without actually having bought the new car. This so-called investment deduction - a maximum of 50 percent of the expected net investment costs - has a tax-reducing effect in the year in which it was formed and can be of interest to small and medium-sized companies. By deducting this amount, the profit is reduced - and this ultimately results in a
tax advantage
. Provided he meets an
important deadline
here .
In plain language this means:
An entrepreneur buys a new vehicle for his company for 60,000 euros.
He postpones up to 50 percent, i.e. a maximum of 30,000 euros, as an investment deduction to 2021 - and thus reduces his profit in 2021 by 30,000 euros.
However, in order for the entrepreneur to really benefit from the
investment
deduction amount, he must buy the vehicle within three years after the investment deduction amount was created.
So if he states the amount for 2021, he must have bought his new car by December 31, 2023.
If he misses this date and does not buy the car until 2024, the investment deduction amount must be dissolved retrospectively in 2021 and the entrepreneur must pay taxes - including additional interest - back.
However, once the car has been purchased, the investment deduction amount must be released.
At the same time, the acquisition costs can be reduced by the amount of the investment deduction.
That means: In 2022, the company boss will buy a new car for the fleet for 60,000 euros.
The investment deduction from 2021 is dissolved, the profit in 2022 automatically increases by 30,000 euros.
The acquisition costs, on the other hand, are reduced to 30,000 euros, so that the two amounts offset each other from a tax point of view.
However, the
ongoing depreciation
is lower because the purchase price is now only 30,000 euros and no longer 60,000 euros.
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Special depreciation offers further possibilities
In addition to the investment deduction, small and medium-sized companies have the option of making a
special
write-off.
You can deduct up to 20 percent of the remaining acquisition costs as operating expenses in the year of acquisition.
This is also possible if the investment deduction amount has not been used.
Like the investment deduction, this only applies to vehicles that are used
for at least 90 percent of the business
.
The special depreciation allows entrepreneurs to reduce the profit of their company in one year and move it to another year.
If you have a particularly high profit this year, you should go to the car dealer you trust.
(Kristina Funk) *tz.de is an offer from IPPEN.MEDIA.
