The Bundesfinanzhof has once again confirmed (judgment of 13 December 2012, Az. IV R 51/11) that there are no constitutional concerns regarding the 1% rule. Not even when the gross list price of vehicles is no longer the standard today due to various discounts. The case in dispute concerned a used vehicle with a verifiable value of EUR 32,000 and a gross list price of EUR 81,400. For the purposes of the 1% rule, the gross list price is always applied, regardless of whether the vehicle is used or whether the actual vehicle value is verifiably lower. In the case in dispute, an employer had provided an employee with a company car that could also be used for private trips. The vehicle was a used car with a value of just under EUR 32,000. The gross list price when new was EUR 81,400. The tax office assessed the non-cash benefit at EUR 814 per month in accordance with the 1% rule based on the gross list price when new. The employee objected, arguing that the used vehicle value should be used as the basis for calculating the benefit. While we had expected the ruling to be unfavourable, we nevertheless find the decision regrettable.
Frequently asked questions
Frequently asked questions
Is the 1% rule for company cars constitutionally permissible?
Yes, the BFH confirmed in its ruling of 13 December 2012 (Az. IV R 51/11) that the 1% rule is constitutionally sound. The fact that gross list prices are often undercut by discounts in practice does not change this assessment.
Which value applies under the 1% rule for a used car?
Under the 1% rule, the gross list price as new at the time of initial registration is always used, even for a used car. The actual market value or purchase price is irrelevant, even if it is significantly lower.
How much is the non-cash benefit for a gross list price of EUR 81,400?
For a gross list price of EUR 81,400, the 1% rule results in a monthly non-cash benefit of EUR 814 for private use. This amount must be taxed as employment income, regardless of the vehicle's actual value.
Can the lower used-vehicle value be applied instead of the gross list price?
No, applying the actual used-vehicle value instead of the gross list price when new is not permitted. In the disputed case, the employee filed such a request without success – the BFH insisted on the standardized application of the list price when new.
What alternative to the 1% rule exists in the case of a high gross list price?
If the gross list price is significantly higher than the actual vehicle value, keeping a proper logbook (Fahrtenbuch) is a viable alternative. This allows the private usage share to be determined precisely and often reduces the taxable benefit compared with the flat-rate 1% rule.