The vacation season is in full swing and due to the global Corona crisis, many more employees are resorting to the company car for their travels. But is it allowed to take the company car on vacation at all? And what are the regulations that have to be observed? We have summarized the most important things you need to know about the regulations for the use of company cars on vacation.
Use of a company car on vacation – is that possible?
The use of company cars on vacation depends on the respective vehicle fleet and the company-specific regulations. In general, the use of a company car abroad is harmless from a tax point of view, since the 1% method usually applies here. In this case, there is an obligation to pay tax on these trips or journeys according to the driver’s logbook method and to register them.
However, it often happens that the use on vacation can lead to increased costs for the fleet. Here, especially high fuel costs, items for freeway vignette or ferry connections play a major role. All this increases the annual mileage of the vehicle and can quickly exceed the exemption limit of a leasing contract. To avoid this and to set up a general policy in the fleet, every fleet manager should set up a written company car policy that also includes situations such as vacations and free time.
Company car policy for the fleet
Each employee who has access to a company vehicle will receive a transfer agreement at the time of transfer, which should describe and regulate all areas that include the use of the company car, including during vacation and time off. These can be, for example, the use of the vehicle in the free time, assumption of travel expenses, restrictions for certain countries, private travel definition, or also the frequency of use for vacation trips.
Often, the use of fuel cards abroad is also introduced in the company car regulation. Fleet managers here have the possibility despite the 1% taxation regulation to exclude the assumption of fuel costs especially abroad and leisure time. Fuel cards can generally be blocked for use abroad, which also makes sense from a business point of view, since no conversion rates etc. have to be taken into account here, and fuel costs are usually higher abroad and fuel card discounts do not apply.
Restrictions on the use of company cars on vacation
In addition to the fuel cards, there are other restrictions that must be observed when using a company car on vacation:
In many cases, the lessor of leased vehicles has specific guidelines for foreign travel that fleet managers can follow. You can then also enter these in the company car regulation for the country restriction.
Usage restrictions for drivers
You can use the usage restriction to limit the number of drivers and thus also prevent company cars from being unnecessarily driven privately. Here, for example, spouses can be added as additional drivers, but other people cannot, or the vehicles can be released for more than one person.
Mileage limits for private trips
You can also restrict the mileage by the company car regulation. Here the restriction can refer to the year or also to the month. If these limits are exceeded, in many companies employees have to pay for additional kilometers with a private share per kilometer.
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