Company journeys and the correct documentation in the driver's logbook
24. Aug 2022 | By Malena Gärtner
How to keep a complete and correct driver's logbook! Document company trips correctly!
Why a logbook?
If the employer provides the company car to the employee for private use, this is considered a non-cash benefit in financial terms. This must be taxed, and there are two options here:
You apply the 1% rule, then you have to pay tax per month 1% of the gross list price of the new car. A car with a gross list price of 80,000 €, costs per month 800 € tax, in the year almost 10,000 €.
The second option is you keep a complete and comprehensive logbook and note down all journeys made by car. There are journeys that are tax-deductible and journeys that are not. Company journeys or journeys between home and work are deductible. Private journeys are not tax-deductible. The logbook provides evidence of private and business use of the company car.
The difference between private and company journey
All journeys that you make - for purely business purposes - on behalf of your employer are company journeys. The journey from the workplace to the customer and back, the journey from home to the customer and back. All are company journeys.
For a company trip, complete information is always required: destination of the trip, route, reason for the trip, and contact person with the address. You must also enter detours and give reasons for them (e.g. closure of the freeway).
The commute is the trip from your home to your first place of work. If you drive from home to the office every day, it is clear. If you work as a management consultant for months at a time at the client's, it is more complicated. Only one way to the regular place of work can be declared. Please discuss this with your tax advisor.
A private trip is a trip to the ice cream parlor, an excursion or a shopping trip. Here, the date and the kilometers driven are sufficient information.
A mixed trip consists of a proportionate work trip and/or business and/or private trip. This is possible without any problems in the driver's logbook, but you must declare it proportionately. If you pick up your child from school on the way home from the customer (business trip), then declare this detour as follows: You enter the shortest route from the customer to home (Google Maps or similar). You subtract this distance from the total distance actually driven. This is how you calculate your private trip.
When is the logbook the better option?
The driver's logbook can be worthwhile under certain conditions
- the gross list price of the new car is high
- the vehicle was purchased used or is already depreciated
- the distance between home and work is great
- you are a frequent professional and company driver
- they make few private trips
- the running costs (operating expenses) are very low
How do I keep a logbook?
A driver's logbook needs a proper (bound or self-contained) form. In any case, use the industry-standard driver's logbooks; others are usually not accepted. Loose-leaf collections or a driver's logbook in the form of an Excel spreadsheet (or similar) are not permitted. Manipulation is too easy.
Records must be kept continuously, promptly, and by you - not an employee. As soon as you get out of the car after a trip, you must make an entry.
For each trip you enter:
- You must take the direct route, if you take a long detour (traffic jam, highway closure, etc.) you must make a note of it.
- Purpose of the trip. "Client meeting" is not sufficient. "Client meeting on Corona bonus" or "Consultations on financial statements" are correct.
- Destination with city, street and house number. These are companies, authorities and visited persons. If you list companies, you do not always have to write down the whole address. You can fall back on the client number. Especially lawyers or tax consultants list the client numbers. A template protocol customer visit is not necessary.
- For private trips, the date and mileage is sufficient.
- The mileage at the beginning and end of the trip, kilometers driven and signature. You do not necessarily have to enter the travel time (from ... to). For the kilometers driven, you have three columns: business, work and private.
If you use abbreviations for frequent trips (W - K for the trip from home to the office), then you must explain these abbreviations in the logbook. It must be possible for a third person to familiarize themselves with the logbook in a very short time.
Company journeys (business kilometers) are 100% deductible. Journeys from the home to the place of work are taken into account with a limited distance allowance (cost rate). Private kilometers are not deductible.
Problems of the logbook
No matter who you ask: accountants, tax advisors or auditors. Everyone agrees that a logbook must be kept continuously and promptly. Reconciling all repairs, fuel receipts and routes after the fact is almost impossible. You must be able to refer to supplementary documents - in case of inquiries. for example a fuel receipt for gasoline does not match a diesel vehicle.
The mileage of the inspection must match your records, so it is best to take the logbook with you to the workshop visit.
The electronic logbook as an alternative
The electronic driver's logbook consists of an OBD plug-in and an app. The big advantage is that the vehicle's movements are recorded via GPS. You only have to provide the necessary information about the purpose of the trip and the people, companies or authorities visited. The electronic driver's logbook cannot derive this information. The electronic driver's logbook must also be kept continuously in a timely manner. In addition, it must be compliant with the requirements of the tax office.