Taxation of private car usage (Germany)

In Germany every individual has to pay for nearly any perks or benefits they receive from an employer. This applies to private car usage too if the car is owned by a company or a self-employed individual.

Calculating the taxation

The way to calculate the tax works as follows:

Log book Method

Calculation base on actual driven distances, using a log book

Flat basis Method

Basis is the gross-list-price of a car rounded down to the next 100 EUR. This means the original list-price without any reduction or discount at the time of first original use, whether or not the car is used or some years old. VAT and every extra feature (e.g. GPS, leather seats etc.) need to be included.

One per cent of this basis is the taxable amount every month.

Example: Gross-list-price: 45,000 EUR Additional taxable income: 450 EUR each month (e.g. 30% tax rate causes 125 EUR tax payable)

External links

• www.GrowToEurope.com
• IHK Frankfurt am Main
• Calculating automobile benefits (Canada Revenue Agency)