Providing a company car for private purposes is a very popular employee benefit. Not only does it save the employee from having to buy their own car, but it also eliminates the worries and costs associated with its maintenance. Find out what the tax and legal aspects of providing a company car for private purposes are and what the rights and obligations of both parties are.
Tax implications of providing a company car for private purposes
On the employee’s side, the possibility of using a company spam database vehicle for private purposes free of charge is considered non-monetary income. This income is therefore subject to tax and social and health insurance contributions . In all cases, the minimum amount of non-cash income is CZK 1,000. It does not matter how many days in a month the employee had the vehicle at his disposal or whether he actually used it.
The employer can also voluntarily pay for fuel consumed during an employee’s private trips – this is also a non-monetary taxable income of the employee.
Example
In the case of a low-emission vehicle purchased by the company for CZK 1 million including VAT, the employee will receive non-cash income of CZK 5,000 per month in their tax base. Income tax and social and health insurance premiums will be deducted from this tax base.
What is a zero-emission and low-emission vehicle?
A zero-emission vehicle is simply a vehicle that emits no CO2 . For tax purchase cell phone numbers by zip code purposes, a low-emission vehicle is one that meets a CO2 emission limit of 50 g/km and 80% of the real-world air pollutant emission limits until 31 December 2025. This includes plug -in hybrids, for example.
Determining the vehicle’s entry price
In order to correctly calculate an employee’s non-cash income, you need to know the initial cost of the vehicle. Here, it is necessary to distinguish whether it is a vehicle in the company’s business property or a leased vehicle .
In the case of a vehicle owned by the company , this is the purchase price including VAT. This price does not change over the years and is the same regardless of depreciation.
The situation is similar in the case of leasing . The lessee is the leasing company.