- FG Cologne held that providing a company car for unrestricted private use to the daughter of the sole shareholder-manager triggered a complete denial of input VAT deduction for the vehicle.
- For corporate tax purposes, the court treated the car benefit as a constructive dividend (hidden profit distribution).
- The court rejected the tax authorities’ view that, because the car transfer was shareholder-related, all costs of the employment relationship should be reclassified as a hidden profit distribution.
- The case concerns whether the car benefit was caused by the employment relationship or by the shareholder relationship; the court found the latter for the vehicle transfer.
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.
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