In brief
A company car is provided by an employer to a particular person for business and often private use. Private use is a taxable benefit and must be taxed.
What Is the Difference Between a Company Car and a Pool Vehicle?
Permanent assignment. A company car is assigned to one person, while a pool vehicle is booked by different people as needed. This leads to different tax consequences: a company car available for private use creates a taxable benefit; a pool vehicle used exclusively for business does not.
How Is Private Use Taxed?
Two methods are available. Flat-rate valuation under the 1% rule assesses one percent of the gross list price each month; under certain conditions, only a quarter of that amount applies to electric vehicles under the 0.25% rule. Alternatively, a logbook documents actual use.
The choice of method applies to the individual vehicle and cannot be changed at will.
What Does the Company Set Itself?
Everything beyond tax treatment: who receives a vehicle, which vehicle class and budget apply, who else may use it, and what happens during illness, parental leave, or departure. These questions belong in the car policy and company car policy, rather than individual agreements. If they are missing, precedents arise that are difficult to correct later because the provision of a vehicle is part of compensation under employment law.
Further reading
Fleet Management Without Excel Spreadsheets
With the AZOWO Mobility Cloud, you can keep track of your vehicles, costs, and obligations all in one place.
Book a free product demo