If you use a lot of car at work, you might want to negotiate a company car as part of your salary. Car benefits have a significant impact on your personal finances, and especially if you are an entrepreneur, it is simply the smartest from a financial point of view to keep your company car personal rather than personal.
Remember, whether you were an entrepreneur or not, and got a car for you or not, it is worthwhile competing for car loans.
The car benefit is included in the salary
There are two types of car benefits: utility and free car. If you are able to negotiate a salary, you may find yourself in addition to money and various fringe benefits. The utility advantage means that the driver of the car pays the cost of his private driving. Free car benefit means that the employer pays all the costs of the car.
A car benefit is popular because it is usually taxed slightly lower than if the amount corresponding to the value of the car had been given and thus taxed as wages. If you use a lot of car at work, the employee can also think about the extent to which it is the employer’s costs. On the other hand, it is special to have one car at work and another for leisure. Also, if you need a car for work, it is fair that the employer provides it.
However, a car benefit is a taxable income in the same way as a salary. The value of a car benefit is calculated by the taxpayer and is influenced by the purchase price of the car, year of introduction and accessories. Changes can be made to the value calculated using this formula, for example, if the mileage exceeds 30,000 or the logbook entries are scarce.
It is worth keeping the entrepreneur’s car in the name of the company
In particular, it is worthwhile for an entrepreneur to use a company car instead of buying the car as individuals. The entrepreneur is allowed to deduct the tax on the company car. These include loan costs, gasoline and maintenance.
Own car at work
If your employer does not provide a company car, the use of a personal car may still be beneficial in the form of kilometer allowances. The basic amount (2018) is 0.42 € / km.
If working or getting to work requires the use of a car or traveling elsewhere, it may be convenient to use your own car as often as possible. For example, if you have meetings or travel to different projects in an outdoor community, it is easier to use your own car than public transport, which cannot reach all places.
However, the only benefit is not convenience and agility. If your commute is more than 15 km away from your place of work or home, your employer may pay a daily allowance. In 2018, the amounts are
- Partial allowance 19 € for over 6 hours
- Full day allowance € 42 for over 10 hours
- Foreign daily allowance by country
- Meal allowance of € 10.50 for journeys for which no subsistence allowance is payable
Business travel receipts must be kept with you in order to prove to the employer the expenses, such as flights, hotels or transport. Unfortunately, the distance between home and work cannot be reduced for tax purposes, even though it is in the true sense of the word.
Sometimes it is more comfortable to arrive at your workplace with a newer car instead of driving a ton of cabin. Few have the cover for a new car on the sidelines, and most often take out a car loan.