Amount by 1% method | Total costs | Difference | Value to be used
EUR 12,000 (EUR 1,000 x 12 months) | EUR 11.781 (EUR 850 x 12 months plus VAT) | EUR 219.00 | EUR 11.781
The private use of vehicles is taxed on income and sales as withdrawal (§ 6 paragraph 1 no. 4 EStG and § 3 paragraph 9a UStG). They are determined either by the 1% method or by a so-called journey log. In certain cases, however, the cost cap is applied. It states that the costs to be estimated under the 1% methodology may correspond at most to the actual expenses for the vehicle.
First principle: private use of vehicles in German tax law
If a motor vehicle is allocated to the operating assets, all costs are deductible as operating expenses. This applies, for example, to fuel, but also to insurance contributions, taxes and expenses for repairing damage. Allocation to the operating assets is already possible if the operating use is at least 10 % (R 4.2(1) EStR). In principle, the operator could therefore only use the car for 10 % of the operation, but deduct 100 % of the costs according to § 4 (4) EStG as operating expenses.
In order to compensate for this tax advantage, there is the principle of so-called withdrawal – here the cost cap does not play a role at first. The entrepreneur must tax the private use of passenger cars according to § 6 (1) no. 4 sentence 2 further following EStG as additional operating revenue. He has the choice between two investigation methods:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.