Private use of company car: (1) Flat rate method for business use

If you use your vehicle for business purposes more than 50% of the time, you can generally calculate private use using the 1% method. You do not need to provide individual proof of your private journeys.

For each month, 1% of the gross list price is generally considered as private use. The relevant amount is the domestic list price at the time of first registration, including extras and VAT – not the actual purchase price paid.

Private usage value = gross list price × 1% × months of use

Example: The gross list price is 30,000 Euro:

• 30,000 Euro × 1% = 300 Euro per month.
• For 12 months, the private usage value is 3,600 Euro.

If the flat-rate usage value exceeds the relevant actual vehicle costs, the so-called cost cap may apply.

How are journeys between home and the primary place of business taken into account?

Journeys between home and the primary place of business are subject to special regulations. When using the 1% method, the following amount is generally calculated:

Gross list price × 0.03% × distance in kilometres × months of use

This amount is not simply an additional private share. For these journeys, the distance allowance can still be deducted as a business expense. For 2025, it is 0.30 Euro per kilometre for the first 20 kilometres and 0.38 Euro from the 21st kilometre.

For eligible electric and hybrid electric vehicles, the appropriately halved or quartered gross list price is used for the 0.03% calculation.

What are the special conditions for electric vehicles in 2025?

For pure electric vehicles with zero CO2 emissions, only a quarter of the gross list price can be used with the 1% method. Economically, this corresponds to a rate of 0.25% of the full gross list price per month.

For electric vehicles purchased or leased in 2025, the following price limits apply:

• Purchase or lease from 01.01.2025 to 30.06.2025: Gross list price up to 70,000 Euro.
• Purchase or lease after 30.06.2025: Gross list price up to 100,000 Euro.

Example: For an eligible electric vehicle with a gross list price of 50,000 Euro, the private usage value is 125 Euro per month:

50,000 Euro × 0.25% = 125 Euro.

If the electric vehicle exceeds the relevant price limit, half of the gross list price is generally used if the legal requirements are met. This corresponds to a monthly rate of 0.5% of the full gross list price.

Note: For vehicles purchased or leased before 2025, different price limits may apply.

What are the special conditions for plug-in hybrids in 2025?

For a plug-in hybrid purchased or leased in 2025, generally only half of the gross list price is used if at least one of the following conditions is met:

• CO2 emissions of no more than 50 grams per kilometre or
• pure electric range of at least 80 kilometres.

With the 1% method, this corresponds to a monthly rate of 0.5% of the full gross list price.

For plug-in hybrids purchased or leased before 2025, the conditions at the time of purchase or lease apply.

How is VAT calculated?

Private use may be subject to VAT as a non-cash benefit, provided the vehicle or vehicle costs were eligible for input tax deduction.

If private use is calculated using the 1% method, this value can also be used for VAT for simplification purposes. Since not all vehicle costs are subject to VAT, the value may be reduced by 20% as a flat rate.

Example: The private usage value is 3.600 Euro:

• 3.600 Euro minus 20% = 2.880 Euro.
• 19% VAT on 2.880 Euro = 547.20 Euro.

Important: The income tax reduction or quartering for electric and hybrid electric vehicles does not apply to VAT.