An asset-managing limited liability company is a special form of asset management that can be particularly useful for persons with high private and capital assets. The main task of this type of corporation is to manage the assets brought in.
The primary objective of the limited liability company is the long-term accumulation of assets through reinvestment of tax savings, which the company receives subject to compliance with various conditions. Particularly in the area of real estate investment, the establishment of a VV GmbH plays an important role in making tax relief possible.
But what is the situation within the asset-managing GmbH with a company car look like?
A vehicle is considered a company car if it is purchased by a corporation and provided to the shareholder or managing director or an employee. In addition, the company car must be used more than 50% for business purposes.
Unlike in normal limited liability companies, where business trips are the order of the day, this is not the rule in a VV GmbH. Seen in this light, there is no urgent need for a GmbH company car to keep a company car.
However, you may still wish as a director to use the cash flow generated within your limited company.
You are toying with the idea of a company car for your asset-managing GmbH but the question remains: Does a company car make sense in the asset-managing GmbH? We would like to help you answer this question.
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GmbH deduct company car
You would like to deduct the GmbH company car? How this works, what you need to bear in mind and how to use a and how you can use a company car in an asset-managing we will now explain to you.
You are probably familiar with the accounting of a company car in the form of lump-sum accounting, the most common method of accounting. This is not relevant for the managing director of a GmbH who wants to finance a company car from cash flow. For the sake of completeness, the principle should nevertheless be briefly explained:
Travel costs are settled kilometre by kilometre if the own car is used for journeys. For passenger cars, the flat rate is 30 cents per kilometre travelled. Kilometres travelled can be claimed for tax purposes, but only under certain conditions. The total amount can be deducted as income-related expenses from the total taxable income. It does not require much effort, but is also not very lucrative.
Let's now take a look at how exactly this works and what options you have to acquire a company car within a GmbH and deduct it.
Strictly speaking, the car is paid for by the cash flows generated by the company instead of paying for the car privately. So you receive a benefit in kind instead of salary. The company car is a remuneration component. However, the whole thing must be listed in the payroll and recorded in the form of an employment contract.
Can you use the Can you use the company car of an asset management GmbH for private purposes?
Often there is a desire to use the vehicle for one's own purposes as well.
What then applies to the GmbH company car forprivate use?
The employer, in this case your GmbH, pays all the costs of the vehicle. You are then only affected in terms of taxes: You only have to pay tax on the non-cash benefit that arises as soon as you are provided with a company car as a managing director. The so-called "private use share" can be determined as follows.
With this regulation1% of the gross list price of the vehicle is added to the income and taxed as a lump sum for private journeys. In addition, 0.03% of the gross domestic list price of the car must be added to the gross salary for each kilometre of distance between work and home. Example: If the distance between home and work is 10 kilometres, another 10 x 0.03 = 0.3% of the gross list price must be taxed in addition to the 1% of the gross list price.
With the driver's logbook, each individual journey and all costs incurred must be documented. Accordingly, the evaluation takes place to determine the private benefit, which is then taxed.
Which of the two methods pays off more for you depends on various aspects, such as the annual mileage, the proportion of private use and the vehicle model.
In general, however, it can be said that the 1% rule is particularly worthwhile from a tax perspective if the company car is often used privately and then for long distances. You get off most cheaply if the distance between work and home is as short as possible.
If the vehicle has a very high list price when it is first registered, keeping a logbook can still make more sense than the 1% rule.
The driver's logbook is desirable if the main focus is on business use and the car is used very little for private purposes. Only through precise documentation can private use be proven.
TipHowever, if you want to drive in the best possible way for tax purposes, you should keep a logbook despite the application of the 1% rule in order to choose the more profitable option at the end of the year.
However, the private use of a company car by the GmbH managing director also repeatedly leads to discrepancies during company or wage tax audits.
It is important to ensure that no hidden profit distribution can be assumed by the tax office. In the case of a disguised profit distribution, no taxation takes place according to the driver's logbook or with the 1% advantage. You are threatened with an income tax arrears payment.
Private use must be clearly and unambiguously regulated in a contract with your GmbH.
If you really want to use the car for business purposes only, any costs related to the vehicle are to be considered business expenses. The GmbH can then deduct the entire costs, depending on the type of purchase and use.
You are obliged to provide information to the tax office and must provide evidence in the form of a logbook to prove that the vehicle is used exclusively for business purposes. Owning a second car for private purposes is also a prerequisite. Otherwise you will be deemed to have used the company car for private purposes.
Even in the case of exclusively business use, the whole thing should be laid down in the form of a private use ban.
If you also use the business car of your GmbH for yourself, the private use portion must be taxed, as already explained above. This is a non-cash benefit in the form of remuneration in kind, which is subject to tax.
The private use of a company car does have its advantages.
As already mentioned, factors such as the possibility to write off the entire acquisition costs as well as the costs of use, which are seen as operating expenses, have a profit-reducing effect on your GmbH. This results in a tax advantage.
However, especially in the case of models with high list prices, you must be aware that the taxation of your private use share with the frequently applied 1% regulation is sometimes accompanied by high levies for wage tax as well as social insurance.
Now imagine the following scenario: You buy the car you want privately and then decide to rent it out to the GmbH as a company car. rent it out to the GmbH as a company car.
We would now like to present you with a possibly wiser variant, with which you can enjoy the advantages of a company car from the point of view of your corporation, but which can also make your private situation more advantageous from a tax point of view.
In this case, you also do not have to take into account the gross list price, which would throw a spanner in the works, especially with the frequently used 1% regulation. The vehicle is to be allocated to your private assets, not to the assets of your GmbH. You can use it privately, without restrictions and as much as you wish.
The car is available to your corporation as a company car for a rental or leasing fee. You are, so to speak, the lessor of your private vehicle to your own limited liability company. However, the income generated for you from the rental must be taken into account for income tax purposes. At the same time, you can also deduct the acquisition costs of the car.
You can also benefit from this model from the point of view of your GmbH, as the rental fees are in turn tax-deductible as a business expense, immediately and in full.
A clear distinction between private and business use must be recognisable at the outset, so that the tax authorities can use this information to determine the percentage rate at which the car can be depreciated. The more the vehicle is used for business purposes compared to private use, the higher the depreciation.
Let's now look at the fact that by deducting the acquisition costs, they were already able to write off about half of the purchase price again from the tax office after the average 6-year depreciation period.
Assuming you now sell the car again, in the best case as a tax-free private sale, you can expect to receive the other half again. Depending on the loss in value of the car, it is even possible for you to make a profit. However, if the sale were to take place through your GmbH, you would not be able to avoid taxation.
As you can see, this variant combines the advantages of a company car for your asset-managing company with those for you as a private individual and allows you to approve your dream car with as few compromises as possible.
GmbH Buy or lease a company car?
Assuming you finally come to the decision to purchase a company car, the question will arise: Should I buy the GmbH company car or lease it?
If you opt for the former, you will of course incur high costs at the beginning, but unlike with leasing, you do not expect any additional payments in the event of damage when you return the vehicle.
The significant advantage of leasing is of course the lower cost factor at the beginning. The vehicle is paid for simply and conveniently in monthly instalments. At the end of the leasing period, the vehicle is returned to the contractual partner.
If you take a look at depreciation, you should bear in mind that the vehicle cannot be fully written off immediately when it is purchased. Normally, depreciation takes place over a period of six years.
Although there are small tax advantages over the years, there are no large tax savings in the year of purchase.
The purchase also has a negative impact on your company's capital.
With leasing, on the other hand, you can deduct all fees, but only on the condition that the vehicle is used 90% exclusively for business purposes.
However, you can also deduct the leasing fees if you want to use the vehicle more for private purposes. In this case, however, you must ensure that the majority of the use is for business purposes. The leasing instalment can be deducted on a monthly basis.
If you are aiming to purchase a company car, you should consider doing so in the form of leasing to make the best possible tax savings.
Conclusion: The topics of company cars, private use and tax benefits are quite complex. It is good that there are clear regulations on how the company car is to be handled. If you have an asset-managing GmbH, e.g. with real estate in the GmbH, there are numerous possibilities for using a company car for business purposes. If the properties are in different locations, the duty (appointments on site at your properties) and the nice (such as a holiday near one of your properties or on the way there) can be combined. Those who proceed with some skill can use many of the existing rules to their advantage here.
Speaking of broadly diversified real estate locations: At Meine-Renditeimmobilie, we develop properties all over Germany. Many of our clients buy these income properties in an asset management real estate GmbH in order to benefit from tax effects. We would be happy to advise you in this regard.