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Save on taxes with the company car when you buy it!

Reading time 4 Min.

Save on taxes with the company car when you buy it!

You can save taxesif you have one now Company cars to buy. This article tells you what you need to know about taxes. The purchase of a vehicle is an expensive investment for every entrepreneur, but it is often unavoidable. How good that the legislator has ensured that you spend on your company car tax deductible. But how is the purchase of a vehicle tax deductible? If you buy a company car for your company, you can not deduct the entire purchase price from your taxes as a business expense. Profit is only affected by depreciation. The acquisition costs are about the usual useful life of the vehicle, which for a car is usually six years or 72 months, starting with the date of purchase. This means that if someone waits until June 2022 to buy a car, their depreciation will end in May 2028, while entrepreneurs who take action as early as January 2022 will have “closed” the period in December 2027.

apply for an investment deduction

Even if the company owner has not yet bought the new car, he can part of the acquisition cost claim as a business expense. This so-called Investment Deduction Amount, which allows small and medium-sized enterprises to deduct up to 50% of their estimated net investment costs, has a tax-saving effect in the year of its establishment and can be of interest. Profit is reduced by this deduction, resulting in a tax advantage. Provided, of course, that they meet an important deadline.

Save on taxes with the company car when you buy it!

In plain language, this means that if an entrepreneur spends 50.000 euros on a new vehicle for his company, he deducts up to 50% as an investment deduction, i.e. a maximum of 25.000 euros, into the year 2021, increasing his profit in 2021 reduced by 25.000 euros. However, the entrepreneur must use the vehicle within three years acquire after the formation of the investment deduction amount. So if he declares the amount for 2021, that means he can keep his new car by 31 December 2023 must have bought. If he misses the deadline and does not buy the car until 2024, the investment deduction for 2021 will be reversed and the entrepreneur will have to pay the corresponding taxes plus interest.

Save on taxes with the company car when you buy it!

However, the investment deduction must be released as soon as the vehicle is purchased. At the same time, the amount of the investment deduction from the cost of acquisition subtracted from. This means that in 2022, for example, the managing director of the company will spend 50.000 euros on a new car. From 2021, however, the investment deduction will be reversed and the profit in 2022 will automatically increase by 25.000 euros. The acquisition costs, on the other hand, are reduced to 25.000 euros, which means that the two amounts are offset for tax purposes. Since the purchase price is only 25.000 euros instead of 50.000 euros, the ongoing depreciation is lower.

special depreciation offers additional possibilities

In addition to the investment deduction amount, small and medium-sized enterprises can also one-time depreciation take advantage of. In this way, you can save up to 20% of the remaining acquisition costs as operating expenses in the year of purchase drop. And even if the investment deduction amount has not been used, there is a possibility. This applies, as does the investment deduction, but only for vehicles that are at least 90% used operationally. The special depreciation allows entrepreneurs to cut their profit in one year and postpone it to the following year. So if you made a lot of profit this year, then you should visit your trusted car dealer.

Are you planning to buy a new car and are you therefore looking for financing? Or should the modified baby and its attachments simply have the best possible insurance? Then ours Credit, financing, leasing, insurance & Co. categories exactly the right place to go for information. And also cheap financing for Accessory parts is there. Is the new one forged wheel, the planned Airride air suspension or the one you want foiling too expensive? Then a little one might help Financing in the process of implementing the modification on the vehicle. And also the topic Leasing or the vehicle sales are not neglected here. Just click through the posts and get the answer to your questions.

Save on taxes with the company car when you buy it!

Of course, that wasn't the end of it!

tuningblog has countless posts on the topic Credit, financing, leasing, insurance & Co. in stock. Do you want to see them all? Just click HERE and look around. The following is an excerpt from the last contributions from this category:

Study on automated driving: Insurers see little potential for relief!

Save on taxes with the company car when you buy it!

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Save on taxes with the company car when you buy it!

What does car leasing bring to private individuals?

Save on taxes with the company car when you buy it!

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About Thomas Wachsmuth

Thomas Wachsmuth - He has been an integral part of tuningblog.eu since 2013. His passion for cars is so intense that he invests every available penny in them. While he dreams of a BMW E31 850CSI and a Hennessey 6x6 Ford F-150, he currently drives a rather inconspicuous BMW 540i (G31/LCI). His collection of books, magazines and brochures on the subject of car tuning has now reached such proportions that he himself has become a walking reference work for the tuning scene.  More about Thomas

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