- Company cars are often incentives for employees
- Private use of company cars by employees is generally considered a taxable service
- A basis for assessment must be determined for this service
- Payroll tax flat rates are commonly used in practice
- Recently, tax audits have become more restrictive regarding the use of the 1 percent method for VAT purposes in salary conversions
- The tax administration increasingly opposes the applicability of the 1 percent rule
- They argue that there is no barter-like transaction in these cases
- The employee’s consideration is seen as a regular payment, not a partial work performance
- This payment is considered a higher gross salary conversion
- Affected taxpayers face significant tax back payments
Source: datenbank.nwb.de
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
