“Use of company car with home office.”
If an employee is also given a company car to use for private purposes, a benefit of use determined according to the so-called flat-rate 1% rule is regularly subject to income tax and social security contributions for the employee. For journeys between home and the first place of work, a taxable benefit in kind is recognized – also in a lump-sum procedure – in the amount of 0.03% of the gross list price of the car per mile per month; the lump-sum calculation of the benefit in use is made irrespective of the number of actual journeys.
It should be noted that in the case of employees with increased working hours in the home office (such as due to the current Corona crisis), an individual assessment of the benefit of use can be made if necessary. In this case, only the actual journeys to the place of work are taken as a basis and 0.002% of the car list price per distance kilometer is applied for each journey.
A change to individual assessment may be advantageous in particular if the employee travels to the place of work on average less than 15 days (15 days 0.002 % = 0.03 %) per month. The application of the individual assessment is limited to a total of 180 trips in a calendar year; however, there is no monthly limit of 15 trips.
In the case of the flat-rate method, travel between home and the first place of work is only not recognized if no travel has taken place for an entire (full) calendar month.
The employer must determine the application of one of the two calculation methods uniformly for each calendar year. It is not possible to change the calculation method during the calendar year. However, the individual valuation can still be applied retroactively at a later date as part of the income tax assessment with effect for the entire calendar year.
The prerequisite for the application of the individual assessment is that the employee declares to the employer in writing (on a calendar month basis) on which days (with date specification) he/she actually used the company vehicle for journeys between home and the first place of work; the mere specification of the number of days is not sufficient. However, no information is required as to whether and, if so, how the employee got to the first place of work on the other working days.
It may be advisable for affected employees to make the relevant records promptly during the calendar year in order to simplify the obligation to provide evidence.