FINANCE / ADMINISTRATION

Private use of company electric vehicles

For purposes of taxing the private use of electric vehicles or hybrid electric vehicles that have externally chargeable mechanical or electrochemical batteries, the list price will be reduced by the costs of the battery system as contained therein at the time of the vehicle’s initial registration. If the costs of the battery system are not included in the gross list price, this price will be used without deductions for purposes of assessing tax. For vehicles initially registered before 31 December 2013, the list price will be reduced by 500 euros per kWh of battery capacity. This sum will be reduced for vehicles purchased in the years thereafter by 50 euros per kWh of battery capacity each year. The reduction in the list price is capped at 10,000 euros per vehicle. This maximum amount will be reduced for vehicles purchased in the years thereafter by 500 euros per year.


Commuter allowance

The 2007 Annual Tax Act eliminated the commuter allowance for employees for the first twenty kilometers between residence and workplace. However, under the legal system of the Income Tax Act, the fiscal treatment of commuting as personal driving was not without problems from a constitutional perspective.
On 09 December 2008, the German Constitutional Court ruled that the decision of the German Bundestag (federal parliament) eliminating the commuter allowance effective 01 January 2008 is not compatible with the provisions of the German constitution.

Therefore, the commuter allowance can be claimed retroactively for the period starting on 01 January 2007 and until 31 December 2009, in accordance with the provisions applicable until 31 December 2006, i.e. at a rate of 30 cents right from the first kilometer. In light of the current economic situation, the German government has declared that it will not initiate any measures aimed at recovering the roughly € 7.5 billion in lost tax revenues for the years 2007 to 2009 resulting from the implementation of the ruling through cuts in other areas. So far, the German government has not yet said anything about how the issue will be treated as of 2010.
Right from the start, the VDIK had felt that the cutting of the commuter allowance was giving off the wrong signal to motorists, and lobbied the government to ease the financial strain on motorists and free up money for the purchase of modern new vehicles with eco-friendly technology.