Company car privilege: tax advantages for high incomes – economy

This is a number that symbolizes how Germany is also an automotive country: 63% of all new cars have been registered as commercially in the past year. Half of that ended up in commercial fleet operations, commonly known as: primarily as a company car. A considerable number that is desired: The German state supports the purchase and use of company cars with tax, also for the benefit of the domestic automobile industry.

Today, the think tank Agora Verkehrswende, in collaboration with the Öko-Institut, painstakingly calculated the effects of this automobile cycle and came to a clear conclusion: “The current structure of the taxation of company cars has thwarted efforts to achieve a socially balanced traffic recovery ”. The new federal government should urgently tackle comprehensive change, for reasons of climate protection, the authors say, but also for reasons of social justice. In any case, it is not enough to “refresh this regulation a little ecologically”, considers the director of Agora Christian Hochfeld. The emphasis here is above all on the private use of company cars: tax breaks in this area alone cost the state between three and six billion euros per year.

The heart of the regulation is that company car owners only have to pay one percent of the list price per month. Even lower tax rates apply to electrified vehicles – between 0.25 and 0.5 percent. In one of the examples from the research institutes, Mr Mustermann, single and childless, earns a gross salary of 71,000 euros – and is faced with the question: organize a company car or buy a private car (an Audi model diesel Q5 is included in the invoice) and business trips (4000 km per year) are paid by mileage? The private car would clearly be a disadvantage for him. Whether he invoices the private part (16,000 km per year) using the logbook or according to the list price method: the company car is more lucrative – also for the employer, who can deduct the purchase and operating tax, which is generally cheaper than labor costs. According to the researchers, if the contract is drawn up accordingly, a joint financial benefit for employers and employees of more than 3,000 euros per year can be obtained.

These are advantages that the tax community grants especially to those who already earn good or very good income. Expressed in Agora and Öko-Institut figures: about half of the money goes to one-fifth of households with the highest incomes, while households with the bottom half of incomes receive only about one-fifth of the income. fifth of the money. And, according to the researchers’ review: Subsidized vehicles are particularly harmful to the climate, as they have on average a significantly higher engine power (160 hp) than private cars (115 hp) and travel around 30,000 kilometers, or two many times a year. Paradoxically, the advantage tends to increase with the size, weight and fuel consumption of the vehicle. A climate control effect due to the additional benefits of electric cars is also not noticeable: individuals register twice as many battery-powered cars as commercial users.

In short, “the social and ecological imbalance” of the taxation of company cars is particularly pronounced in this country, according to the researchers, who deem the solutions of Great Britain and Belgium more judicious: these countries differentiate the measure of the monetary advantage according to CO2 emissions. The higher the emissions, the higher the tax levy.

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