The debate about reforming the taxation of company cars is in full swing: The Greens want to increase taxes on company cars in order to weaken state incentives to buy environmentally harmful cars. Federal Finance Minister and FDP leader Christian Lindner, on the other hand, believes that the very use of the term company car privilege in the debate is evidence of “left-wing framing”.
Whether the taxation of company cars should be adjusted? The majority of the Handelsblatt readers who responded to this question agree. On the one hand, the “sponsorship of the car manufacturers” is criticized, which can largely deduct the costs for company cars from taxes.
On the other hand, the climate-damaging aspects of company cars cause resentment: According to one reader, “bicycles, cargo bikes, e-bikes, e-cars, charging stations and public transport” should be subsidized. Another reader demands: “Only company cars should be subsidized that are environmentally friendly and do not exceed a defined size.”
However, there are also other voices: “When it comes to company cars, I often ask myself where exactly the tax privilege should be,” writes one reader. Another believes that it is currently clearly “a debate about envy among the urban population who have been neglected”.
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We have put together a selection for you from the various letters from the Handelsblatt readership.
Better a raise than a company car
“I had a company car myself for several years, but not for almost ten years. Of course, it’s a good thing if you can drive a big car with practically no restrictions for a comparatively small amount of tax. But let’s be honest: Those who get a company car are usually the ones who can afford it themselves.
Should employers adjust salaries accordingly so that those who are no longer privileged can buy or lease a car? And real company cars, which are used by field staff, for example, could then continue to be subsidized by the state with a clear conscience.”
Roland Stamm
What privilege please?
“When it comes to company cars, I often ask myself where exactly the tax privilege is supposed to be. With the flat-rate one percent rule, the taxed amount is regularly higher than the separately determined total costs of the company car.
The correction is labour-intensive using a logbook in the annual tax return. This is the case for many company car drivers, and in our society many top performers are busy dealing with this type of bureaucracy. Those resources could have more value elsewhere.”
Christian Schwarz
If you buy privately, you buy smaller
“If there are no more company cars, everyone has to buy the vehicle themselves. Of course, that will often be one number smaller than the ‘sponsored’ mobile. This may also contribute to reducing CO2.”
Gerd Neusen
“Savings” is the word of the hour
“Is that worth the debate? Oh yes, because public servants everywhere help themselves, it seems unashamedly, to bulging purses of money, financed by good German citizens. ‘Savings’ is the word of the moment, also when it comes to company cars. Of course, the ladies and gentlemen should be mobile, many may no longer be able to drive properly, but cheaper models and car sharing would be an option.
It would be good to see action, that our politicians set a good example and finally start what was promised in the election campaign: REFORM! Otherwise Germany will be bureaucratized to a standstill.”
Iris Zessner
We promote the luxury brands
“We are currently promoting the luxury brands in the automotive industry, which in turn no longer wants to produce more economical, lighter and smaller vehicles. At the same time, we also prevent the switch to more economical or environmentally friendly transport concepts.
It might help to mark official and company cars with a ‘red bar’ on the bumper, right next to the number plate. Then everyone could see who can really afford their own petrol guzzler privately.”
David Merbecks
A normal earner does not buy a BMW for 75,000 euros
“Let’s face the truth: The company car privilege is only a secondary tax rebate for companies, primarily a sponsorship by the car manufacturers, who can thus push through their more than inflated prices. Do you think a normal earner buys a BMW X3 for 75,000 euros and pays 280 euros an hour in the BMW workshop?!
Additional information: In the USA, Toyota sells a family van for just under 30,000 dollars, you won’t find such offers in our car lobby in Germany.”
Alexander Glaser
A limitation to e-cars is not legitimate
“There should still be company cars. Since there are currently not enough electricity charging stations, a limitation to e-cars is not legitimate. It is questionable why members of the Bundestag are not subject to the company car regulation and thus to taxation. Companies should be held more responsible and make sure that trips, for example on vacation, are borne by the employees themselves (there are companies that already do this).”
Mike Wagner
Company cars prevent the saving of fuel
“In my view, this is not about justice – what is fair anyway – but about meaningfulness. I am of the opinion that it makes no sense to give company cars tax breaks, since on the one hand it only benefits higher earners and on the other hand it only boosts energy consumption.
The company cars usually also include fuel cards, which can also be used privately. That’s a nice thing, but it completely prevents fuel savings.”
Mark Haeusler
Rather private with the E-Smart to work
“Most oversized, resource-wasting and climate-ruining luxury class limousines would not be afforded by private individuals, but only the company car privilege allows them to be financed by companies. How much more space would there be on the streets, how much quieter it would be and how much better the air if everyone, like me, has been driving to work with the E-Smart for the past nine years, which you can afford privately even without a company car privilege.”
Christopher Gerstberger
Service car yes, but only green
“Only company cars should be subsidized that are environmentally friendly and do not exceed a defined size.”
Ursula Steudle
Definitely a jealous debate
“The company car is part of an employee’s income, like their own office or their own secretary or assistant. In my opinion, this is clearly a debate about envy among the neglected urban population.
We should be happy that employees manage to get a company car because of their good work, and also secure (well-paid) jobs with it. I have and never had my own company car, I am retired.”
Rolf Ackerman
Company car privilege must go
“The company car privilege must be abolished entirely. Why should we subsidize luxury company cars with scarce tax money, but cheap public transport tickets are free mentality wishes.”
Heinz Schwalb
A speed limit would be more important
“Company cars are needed to exercise the respective profession and are therefore still bought. From my own experience, I know the joy of driving fast without having to consider the costs. Therefore, from an environmental point of view, a speed limit would be more important than the one percent rule.
Private use with a driver’s log is already possible today and is electronically recorded no longer a great deal of effort – and you get the ‘incentive’ in the company car even if the one percent rule is canceled without replacement.”
Wilfred Thies
Subsidizing green transport makes more sense
“The answer is simple: it is not fair to subsidize company cars. And nowadays that is not feasible either.
However, what can be subsidized in order to develop a meaningful steering effect are: bicycles, cargo bikes, e-bikes, e-cars, charging stations and public transport.
Thomas Pohl
The one percent rule is not fair
“I don’t really understand what the savings are. What happens if this regulation is removed? It is likely that the travel expense reports submitted for trips that are then made in a private car (tax-free) for operational reasons will explode, and the savings would go straight back to zero.
The only unfair thing is the one percent rule, which still refers to the new price. I myself have been driving an E-Class for eleven years, which is now twelve years old, and my own taxable share is still one percent of the new price of 85,000 euros.”
Sven Burgwedel
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More: Last week, the Handelsblatt readership debated whether we need a gas price cap.