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Company car taxes: trick helps save money

2022-12-06T05:16:08.627Z

Taxes on company cars: Trick helps save money Created: 06/12/2022, 06:00 By: Simon Mones If you have a company car, you have to pay tax on it. However, if you pay for some extras yourself, you can reduce the monetary benefit by a few euros.  For many Germans, the car is just a commodity they use to get to work, for example. Many drivers are lucky enough to get a company car from their employer



Taxes on company cars: Trick helps save money

Created: 06/12/2022, 06:00

By: Simon Mones

If you have a company car, you have to pay tax on it.

However, if you pay for some extras yourself, you can reduce the monetary benefit by a few euros. 

For many Germans, the car is just a commodity they use to get to work, for example.

Many drivers are lucky enough to get a company car from their employer.

This is easy on the wallet, as in most cases you only have to pay taxes on it.

But even here you can save a few euros.

After all, if you equip your company car with extras and finance them out of your own pocket, you can save on taxes.

In this way, the benefit in kind is reduced, according to the United Income Tax Assistance Association.

The monetary advantage arises because employees can often also use their company car privately.

If you want to save taxes on the company car, you should pay for the extras yourself.

(Iconic image) © Arnulf Hettrich/Imago

Taxes on company cars: Trick helps save money

Accordingly, this – like the salary – must be taxed.

Depending on the drive, time of purchase and emission values, the monthly taxable amount is 0.25 to 1 percent of the gross list price.

If you wish, you can also keep a logbook for calculating income tax on private trips.

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A calculation example: A new car costs 30,000 euros, plus 10,000 euros for special equipment, i.e. 40,000 euros.

According to the one percent rule, there would be a monetary advantage of 400 euros times 12, i.e. 4,800 euros.

However, the monetary benefit only becomes apparent when the 10,000 euros have been used up.

That means: In the first two years, the accruing 4,800 euros are tax-free, in the third year at least 400 euros, which means that the monetary benefit then amounts to 4,400 euros.

In this way, additional costs for a higher-quality vehicle model can also be offset.

You can find even more exciting car topics in the free newsletter from our partner 24auto.de.

Taxes on company cars: Extras reduce non-cash benefits

Assuming an assumed individual tax rate of 20 percent, the tax savings in absolute figures in the calculation example of the United Income Tax Assistance is only 960 euros in the first and second year and 80 euros in the third year.

Not much compared to the 10,000 euros invested.

However, if you want to add a few extras to the company car anyway, the "discount" comes in handy.

(With material from the dpa)

Source: merkur

All tech articles on 2022-12-06

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