Advisor: Vintage cars as a company car: in full use

Because the classic vehicles are usually not well received by the tax authorities and the obstacles to getting the cars as official or company cars are correspondingly high. This is relatively easy for a company that offers historical city tours of a different kind in a classic VW Bully from the 1950s. And even the mobile barista, who drives to the event location in the commercial area with a historic Ford Transit or a team of Citroen 2CV and trailer, will not have any major problems getting his vintage vehicle recognized as a company vehicle. But the situation is sometimes different for the architect, who likes to drive to the office or meetings in his historic Porsche 911 2.2 T, or for a lawyer, who cruises to court dates in his open Mercedes SL 280 Pagoda.

The problem is not the trips themselves, which are often unquestionably work-related, but the fact that the classic model is often used privately too. Because here, many tax offices suspect, not entirely without reason, that the user is concerned with reducing his tax burden and, in particular, with claiming the often high maintenance and upkeep costs of the classic car for tax purposes. One problem is the so-called “one percent rule”, according to which either a logbook is kept for privately used trips or – much more popular – a flat rate of one percent of the new value must be taxed. The new price was very low for many classics, even if these classics now have a market value of more than 50,000 or even 100,000 euros. Another notable benefit is insurance and tax costs. With an H license plate on his classic Mercedes S-Class, the annual tax is not even a flat rate of 200 euros – regardless of the emission class or the displacement of the classic car. In addition, low insurance costs also make an oldie particularly interesting thanks to special tariffs.

If the oldie used to have a new value of just 20,000 D-Mark, the user laughs in his fist, because for a current Audi A4 with the appropriate equipment, for example, the new price is around 50,000 euros; with a current Porsche 911, this could be around 100,000 euros or more, which must be taxed proportionately. The notable advantages for the imaginary tax evader are obvious, because after more than five years the vehicle has a tax value of zero euros in the books. Attention: the current value must be taxed as operating profit, because a classic car worth around 50,000 euros is worthless in the books. Makes 50,000 euros taxable income for the classical music fan. An expensive pleasure.

Another danger is the market value, because while a new or young vehicle loses a significant part of the new price every year, it looks very different with a popular youngtimer or a coveted oldtimer. Here the value often increases and this can have an extremely negative effect on the value of business assets. The only solution is that the user uses his classic for business purposes in less than half the time. In this case, however, the relevant tax office mucks up anyway and the otherwise popular one percent rule does not apply. Then you can’t avoid a logbook.

Some service providers have recognized the problem with the classic as a company vehicle and offer their customers long-term classic car rental or classic leasing. The classic car lover can then claim these monthly costs in full as operating costs and does not have the problem of proportionate private use, which can also become a pitfall when it comes to maintenance costs. This can pay off in tax terms and there is little risk of problems between book value and fair value as the vehicle is only used for a limited period of time. Before you treat yourself to a classic as a company car, you should always consult your tax advisor or the relevant tax office directly. Then you are usually spared nasty financial surprises.