1% method for VAT calculation: A common method to determine the taxable amount for private use is the 1% rule. This calculates VAT based on 1% of the car’s gross list price per month
A company car is not only a status symbol but also a bonus to the salary. If the employer allows the company car to be used for private purposes, the resulting non-cash benefit must be taxed. This benefit is considered as income and must be taxed if it exceeds the limit of 44 euros. The non-cash benefit for a company car can be taxed using the 1% method or by keeping a logbook. The 1% method taxes private journeys at a flat rate of one percent of the gross list price of the car in Germany. The list price is the manufacturer’s recommended retail price.
Source Carano
