If you use your car for your business, there are costs that you can deduct. In this article, we explain how to encode your car expenses in three steps.
If you drive a Utility vehicle
If you drive a Passenger car
Decide whether your car is considered private or business
How to deduct your Private Car
How to deduct your Business Car
1. You drive a Utility vehicle
Vehicles are classified as utility vehicles if they are marked with an N or M in field J of the vehicle registration document. These include vans (whether temperature-controlled, closed or glazed), pick-ups and vans. Otherwise it's not considered a utility vehicle. If you are unsure whether your car meets these criteria, please contact our tax coaches.
If you drive an utility vehicle you can deduct 100% of all expenses related to your vehicle:
Costs for the purchase of a company car (deducted over the years via amortization)
Leasing costs for the company car
Insurance costs for a company car
Gas expenses
Maintenance and repair costs
In the app, simply add your business expenses, with professional use = 100%. Remember to attach the receipt/invoice for every expense.
2. You drive a Passenger car
2.1. First, decide whether it is a private or business car
You need to decide if you have a private or business car. The table below will help you to decide that.
How many kilometers do you drive for business | Your car is | What can you deduct? |
< 10% | Private | commuter allowance (if applicable) + mileage allowance |
10% - 50% | You decide | It depends on your choice (commuter allowance + mileage allowance or logbook) |
> 50% | Business asset | The actual costs (1% rule) or the proportional costs (logbook) |
Use our online tool to estimate how much you can deduct and which method is the most optimized for you.
2.2. If your vehicle is considered "private"
If you have a private vehicle, then you can deduct the costs for the commuter allowance and the mileage allowance. Since you bear all other costs yourself, you do not have to add any monetary advantage for the private use.
Commuter allowance (one-way)
With the commuter allowance you can deduct €0.30 (from the 21st kilometer €0.38) per kilometer of distance to your workplace (e.g. an office or your own business).
To do this:
Go to the expense screen
Click on the three dots next to "create expense" and choose "create an expense manually"
Fill out the form by
choosing the category "car private use"
choosing the destination "drive to office (Pendlerpauschale)"
encoding the distance (one way) to your work
encoding the number of working days
The system will now automatically calculate the deductible amount. All you have to do now is save the expense.
Note that this allowance can be used independently of the mean of transportation (public transport, bike, car), however the maximum deduction is 4.500€/year for transport that is not your car.
Mileage allowance (actually driven kilometers)
If you drive to your customers with your private car, you can deduct €0.30 per kilometer driven (30ct for cars, 20ct for motorbiles).
Important note: This expense has to be encoded for every business trip individually or can be summarized if you keep documentation (e.g. an excel sheet) that lists the individual trips. Make a note of the kilometers driven and the customer or reason for the trip and the time/date immediately afterward.
To do this:
Go to the expense screen
Click on the three dots next to "create expense" and choose "create an expense manually"
Fill out the form by
choosing the category "car private use"
choosing the destination "business trip (Kilometergeld)"
encoding the type of vehicle
encoding the total kilometers (both ways)
The system will now automatically calculate the deductible amount. All you have to do now is save the expense.
2.3. If your vehicle is considered "business"
If you have a business car, you can deduct the costs for it proportionally or completely, but you have to declare a monetary benefit (a fictitious income that covers the private use).
You have the choice between the 1% rule and the logbook. You have to decide this, as soon as it becomes your business car. A change of method is only possible for the new calendar year or if a new vehicle is purchased.
Either the 1%-Rule
If you opt for the 1% rule:
You can deduct 100% of the vehicle costs, e.g. repair costs and fuel costs;
In return, you have to enter 1% of the gross list price as monthly income (the percentage goes down to 0.5% for EVs, and even 0.25% if the list price of your EV is below €60.000);
You will pay 19% VAT on 80% of this monthly income (if you are subject to VAT)
Expenses: In the app, you can simply enter all your costs for your car with 100% business use. Please use the category "business car usage".
Revenues:
1. To encode the revenue, please go to your settings -> car and encode your car first:
2. Click on "add a car"
3. Encode "name", "list price" and "fuel type" and click on save.
4. Click on "encode private usage"
5. A new ticket will open up. Everything will be filled out automatically based on the car data you encoded. All you have to do is encode the usage time.
6. Click "save" to record this revenue. The system automatically creates a revenue with two items, one with 80% of the calculated value as other income plus 19% VAT and the second position with the remaining 20% and 0% VAT.
You can now find your revenue listed right here in the revenue screen:
⚠️ IMPORTANT NOTE! You have to create this revenue monthly.
Or the Logbook
If you decide to use a logbook, you have to record all your trips in such a way that the entries cannot be changed by using a (digital) logbook.
Each trip must be documented in detail and include the following information:
Date
Time
Destination
Purpose of the trip / business partner
Mileage at the beginning of the trip
Mileage at the end of the trip
If necessary unavoidable detours
Expenses: In the app, you can simply enter all your costs for your car. In the professional use field, input an estimate of the professional share of kilometers driven for the entire year. Use always the same % throughout the year. If necessary, this % can be updated at the end of the year with the yearly VAT declaration and EÜR.
Example: You have estimated the professional use at 60% and at the end of the year you find out that the actual professional use was lower. In this case, you must record the difference to the 60% as monetary advantage (fictitious income).
However, the maximum amount to be deducted for traveling to your place of work is €0.30 per kilometer (from the 21st kilometer €0.38), similarly as for private vehicles (see above). You must therefore calculate how high your actual travel costs to the workplace were, and decrease your deductible expenses (with a cancellation expense, for example) if you have deducted more than this amount.
Additional income: none to be considered in this scenario.
You can use our Online Spreadsheet tool to get an estimate of how much you can deduct, as well as a calculation of the best way to deduct your car expenses.
That's it, you're ready to deduct your professional car expenses.
Still have questions, or not sure how to do it? Contact us at support@accountable.eu