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HR & PAYROLL
Benefit-in-kind for multiple motor vehicles
If an employer provides an employee with several vehicles for private use at the same time, a separate benefit-in-kind must be applied for each individual car.
An employer handed over a total of four vehicles for use to its managing director and two other employees over several years. There were no restrictions on private journeys for the employees. According to the company, outside working hours the managing director primarily used the vehicles and could freely choose which car to drive.
For the years 2011 to 2014 there were neither logbooks nor any reliable records, such as mileage records or service receipts, of the actual usage. A proof that the vehicles were used exclusively for business purposes was also missing. The tax office therefore applied a benefit-in-kind value for each vehicle and each month in accordance with the Benefit-in-kind Valuation Ordinance.
The employer argued that where several vehicles are available simultaneously only a single benefit-in-kind should be applied.
Decision of the Federal Fiscal Court (BFG)
The BFG, however, clarified that the mere possibility of private use of an employer‑owned vehicle already justifies the application of a benefit-in-kind. Without proper documentation the actual extent of private journeys is irrelevant. Because the managing director had several vehicles available without restriction, multiple benefit-in-kind amounts must therefore be applied on the basis of the objective possibility of private use.
The objection that the managing director always used only one car at a time was not accepted by the BFG due to a lack of evidence. For the calculation the BFG used the version of the Benefit-in-kind Valuation Ordinance that was in force at the time, which provided a monthly benefit-in-kind ceiling of EUR 600. For the managing director, however, the multiple benefit-in-kind resulted in considerably higher monthly amounts.
Conclusion
The decision makes clear that where several company cars are made available to an employee simultaneously for private journeys, a separate benefit-in-kind value must be applied for each individual vehicle if unrestricted private use is possible and there is no comprehensive documentation of the journeys.
Employers should therefore either set clear usage restrictions for such company cars or require employees who may use multiple vehicles to keep precise documentation via logbooks if only a single benefit-in-kind is to be applied.
For the years 2011 to 2014 there were neither logbooks nor any reliable records, such as mileage records or service receipts, of the actual usage. A proof that the vehicles were used exclusively for business purposes was also missing. The tax office therefore applied a benefit-in-kind value for each vehicle and each month in accordance with the Benefit-in-kind Valuation Ordinance.
The employer argued that where several vehicles are available simultaneously only a single benefit-in-kind should be applied.
Decision of the Federal Fiscal Court (BFG)
The BFG, however, clarified that the mere possibility of private use of an employer‑owned vehicle already justifies the application of a benefit-in-kind. Without proper documentation the actual extent of private journeys is irrelevant. Because the managing director had several vehicles available without restriction, multiple benefit-in-kind amounts must therefore be applied on the basis of the objective possibility of private use.
The objection that the managing director always used only one car at a time was not accepted by the BFG due to a lack of evidence. For the calculation the BFG used the version of the Benefit-in-kind Valuation Ordinance that was in force at the time, which provided a monthly benefit-in-kind ceiling of EUR 600. For the managing director, however, the multiple benefit-in-kind resulted in considerably higher monthly amounts.
Conclusion
The decision makes clear that where several company cars are made available to an employee simultaneously for private journeys, a separate benefit-in-kind value must be applied for each individual vehicle if unrestricted private use is possible and there is no comprehensive documentation of the journeys.
Employers should therefore either set clear usage restrictions for such company cars or require employees who may use multiple vehicles to keep precise documentation via logbooks if only a single benefit-in-kind is to be applied.