Just Mobility

Adjustment of company car privilege

What's the problem?

The tax treatment of so-called company cars contradicts climate protection goals. Usually, a company car is taxed at a flat rate of one percent of the new price per month. Since this regulation is independent of the intensity of use, it is more attractive the more kilometers the car is driven. A second problem is the lack of sustainability: since the tax is constant over time, the arrangement encourages the replacement of company cars with new vehicles. Finally, the company providing the company car can deduct the vehicle and all associated costs as operating expenses - even if the vehicle is used privately by the employer.

What's the measure?

Restriction of the tax-deductibility of purchase and operating costs depending on the (real) CO2 emissions of the vehicle (degressive). Current fixing of a reduction of the limit values in each calendar year. Preference for the continued use of vehicles against new procurement by taking the residual value as a basis.

Adjustment of the pecuniary advantage for the employee depending on the mileage and the (real) CO2 emissions of the vehicle.

No special preference for hybrid or electric vehicles but evaluation of their CO2 emissions according to the local electricity mix or optionally proven purchased electricity mix of the employee.

How does the implementation look like?

Adaption of the tax law.

How does this work against climate change?

CO2 savings through more CO2-efficient company cars and reduced mileage.

Which other positive effects does the measure have?

Making the real costs more transparent.

How fast can the measure be implemented?

Relatively fast.

Problems with social, global or intergenerational justice

The company car privilege can be used primarily by people who are financially better off. A reduction in financial privilege represents a small contribution to social justice.

Further Literature and sources