The gross list price is the manufacturer’s recommended retail price for a vehicle. The gross list price is always of interest to the employer, the employee and the tax office if the company car is used not only for business purposes but also for private purposes. Keywords here: the pecuniary advantage and the 1 percent rule.
What is behind these terms and how exactly the gross list price can be found out is explained in detail in this text.
Things to know about the gross list price
The gross list price of a vehicle is always significant in connection with the application of the 1 percent rule and a company car. This company car must have been provided to the employee by his employer not only for business use, but also for private use.
If this is the case, the employee is entitled to a non-cash benefit. And this imputed income must of course be taxed as part of the annual tax return. There are two options: either the employee keeps a complete logbook or he uses the 1 percent rule. There is no general answer to the question of which option is best, and the assessment varies from case to case. Therefore, it should always be looked at individually, which costs arise in each case exactly. In the case of the 1 percent rule, the gross list price then comes into play, which serves as the basis for assessment.
As already mentioned: the list price represents a non-binding price recommendation of the respective manufacturer and is, of course, always the new price. Even if the company vehicle is not a new car, but a used car, an import or a leased car, the gross list price for the domestic market, i.e. for Germany, is always due and used for the calculation. In other words, it is the price that applied on the day the vehicle was first registered that counts, not the current value or the price that became due for the purchase.
This is how the gross list price can be determined
Anyone who also uses a company car on a private basis is dependent on knowing the exact gross list price of the vehicle – if he or she applies the 1 percent rule for taxing the imputed income. But how exactly can this be found out?
The answer to this question is relatively simple: the gross list price is available either from the ADAC database or – even better – from the manufacturer of the car. The employer issues a written confirmation of the exact amount of the gross list price, which can then be presented to the tax office. But be careful: the figures naturally include sales tax.
Special equipment is a special case
By the way, there is another financial item in addition to the gross list price – namely the special equipment that was installed on the day of initial registration. Here, retrofitted interiors are expressly not counted. The gross list price includes, for example:
- navigation device
- Air conditioning
- Parking heater
- Electronic logbook
- Trailer coupling
- Car radio
- Theft protection
The following, among others, are not added to the gross list price:
- Costs for the transfer
- Costs for registration
- Costs for winter tires (which are purchased in addition to the summer tires)
- Costs for a car phone
- Costs for a hands-free car kit
The 1 percent rule
Those who use the company car privately must pay tax on it, as already described. The keyword here is the pecuniary advantage that arises from the private use of the business vehicle. There are two possibilities for the calculation:
- The (electronic) logbook
- The 1 percent rule
Which method is the most suitable is always a case-by-case decision. Roughly speaking, however, it can be said that employees who use a vehicle with a high gross list price and who drive it relatively seldom for private purposes should consider using an electronic driver’s logbook. Employees of a company who are provided with a car with a rather low gross list price by the employer and often drive it privately should take a closer look at the application of the 1 percent rule.
As for the 1 percent rule, this is a flat rate method of taxation that was once introduced. One percent of the gross list price of the vehicle used is taxed as a non-cash benefit. That by the way per month.
In addition to the one percent, further percentage points are added if the employee makes trips to the family home and has to make a regular trip to work. Anyone who runs a double household, for example, because he does not work at the family’s main residence, but in another city and for this reason owns or has rented a second apartment there, normally travels regularly to the family. Such trips to the family home are taxed at 0.002 percent per kilometer of distance per trip. In the case of a commute, i.e. the regular trip from the home to the first place of work, taxation takes place at a rate of 0.03 percent per month and kilometer of distance.
Calculation example for the 1 percent rule
In order to illustrate the gross list price and the 1 percent regulation more clearly, it is of course helpful to make an example calculation. Let us therefore assume that an employee is provided with a company car that has a gross list price of 41.000 euro has. In addition, a navigation system, an anti-theft device and a trailer coupling were installed in or on the vehicle when it was first registered, which together cost 3500 euros and are added to the gross list price accordingly. However, the costs for the hands-free telephone system in the amount of 200 euros are not included. together, i.e. the gross list price of the domestic vehicle plus the special equipment, this results in a total of 44.500 euro. For the 1 percent rule, 445 euros, i.e. one percent of 44 percent of the gross salary, is added.500 euros, set at.
However, as explained earlier in the text, this is not all, finally, the work route must also be taken into focus and declared. Since the employer in question commutes 20 kilometers a day one way from his home to his first place of employment, the 44.500 euro multiplied by the 20 kilometers. This results in a value of 890.000. Of this amount 0.03 percent are 267 euros. This percentage will be taken into account by the tax office for the commute to work. These 267 euros plus the 445 euros (one percent of the gross list price) result in a total monetary benefit of 712 euros.
Since the fictitious employee receives a gross salary of 3,500 euros per month, the 712 euros for the imputed income are added to the 3,500 euros, which is why the taxable gross salary is not 3,500 euros, but 4,212 euros.
Whether the application of the 1 percent rule is worthwhile in view of this considerable sum, which is additionally taxable and can increase due to a higher gross list price or more distance kilometers, is an individual decision.