Income tax for Company car (Firma Wagon) in Germany

Welcome to Germany. Land of your Dream Autos. sometimes its really tempting to own an Auto especially when you get it as a part of your Job Contract. But Wait!! Are you aware of the extra tax for your auto ?

Let us make it simple. There are two methods to calculate your extra tax when you have an Auto as a benefit from your firm. The first method is based on the kilometres you run and its basically wants you to keep a log of your travel distance. This one is pretty not practical and we don’t want to write more about it for now. The second method involves a flat rate based on two factors.

  • List price of your Auto
  • Distance between your Home and office

Let’s see how it’s calculated. Here the state considers whatever the benefit you have from the firm is taxable as otherwise you could have bought it from your own money. Simple!! We know its annoying. Welcome to Germany!!

As such it considers your salary as your actual salary plus additional benefits.

New monthly salary = existing monthly salary + 1% of List price of your Auto + 0.03% of List price of your Auto * distance in km between your home and office. Here 1 % is the financial benefit charge.

Let’s say you have a yearly salary of 60.000 €.

Monthly salary = 5000 €

if List price of Auto = 50.000 € and distance between home and office = 10 km;

then you extra benefits sums to 500 + 150 = 650 €.

New monthly salary = 5000 +650 = 5650 €.

Now this is your monthly brutto salary which will be taxable as regular.

Netto salary = 3290,95 € (Tax class I) .

Now this netto salary includes additional benefit of 650 €.

Final netto salary = 3290,95 – 650 = 2640,95 €.

Know More: All about g
Know More: All about German Tax system Here

Eazyleben Tips

  • The tax charge for privately used company cars is lower for electric, plug-in hybrid and fuel cell cars. Instead of paying a financial benefit charge of 1%, only 0.5% is applied. This regulation applies to company cars registered from 1 January 2019 and for the time being for the first 3 years. For plug-in hybrid cars, the car must be externally rechargeable, the electric driving range must be at least 40 kilometers or the car has a maximum carbon dioxide emission of 50 grams per kilometer.
Read Here: Calculate Income Tax online including company car benefits
Read Here: Deadline for tax declaration in Germany


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