Updates on the car benefit in kind

Alongside the tax reform, the fringe benefit values ordinance was recently updated in some points
changed. The changes took or are taking effect at different times.

The changes at a glance

From 01.11.2019:

• Clarification that motorcycles, mopeds, quad bikes, and other motor vehicles also fall under the benefit-in-kind regulations (excluded from these are vehicles with exclusively electric or electro-hydraulic drive, electric bicycles, and self-balancing scooters).
• Express provision for the consideration of one-off or ongoing employee contributions to "luxury vehicles".

From 01.01.2020:

• Regulation for Car Dealerships: Change in Valuation Method for Demonstration Vehicles First Registered from 01.01.2020 and Made Available by the Car Dealership for Private Use by Employees.

From 01.04.2020:

• New CO2 table for first registrations from 01.04.2020 according to the WLTP measurement procedure.

One-off contribution to "Luxury Car"

In practice, it is sometimes agreed that the employee makes a one-off contribution towards the purchase cost of a company car (e.g., at their own request, to obtain a "higher class" vehicle). The previous administrative practice, whereby with a vehicle price exceeding €48,000.00 ("luxury vehicle"), a cost contribution from the employee is deducted from the total acquisition costs (and not from €48,000.00), has now been explicitly laid down in the ordinance with effect from 01.11.2019. Therefore, there is de facto no change in the determination of the benefit-in-kind. This means that the employee's cost contribution – depending on the amount – will either not reduce the benefit-in-kind at all or only partially.

Ongoing cost contribution to "Luxury Car"

The Federal Finance Court (second instance in tax proceedings) ruled, contrary to the long-held view of the Federal Ministry of Finance (BMF), that ongoing cost contributions made by an employee for a luxury company car are to be deducted from the maximum benefit-in-kind value (and not the unreduced value) (BFG 08.08.2019, RV/6100193/2016). As this decision was entirely unsatisfactory to the BMF, the BMF has now "cemented" its legal opinion through an amendment to the Benefit-in-Kind Ordinance, effective from 01.11.2019. The BFG decision is thus superseded by the new ordinance for periods from 01.11.2019 onwards. For periods up to and including October 2019, a decision from the Supreme Administrative Court (VwGH) is still pending (though it is considered likely that the VwGH will confirm the BFG ruling).

Regulation for Car Dealers: Demonstration Vehicles (from 01.01.2020)

If a car dealer makes demonstration vehicles available to its employees for private use, a new method of calculating the tax base applies to first registrations from 1 January 2020 (instead of the 20 % increase plus VAT), a new method for determining the tax base applies. According to the new method, the car dealer’s actual acquisition costs must be increased as follows:

• Serve from 15 %,
• Increase by the (notional) VAT (VAT is calculated on the purchase price + 15 %, excluding NoVA),
• Increase by the (notional) NoVA (calculated on the basis of the purchase price plus 15 %, excluding VAT).

New CO2 table (from 01.04.2020)

The "emissions scandal" in the automotive industry is now also showing its first effects on payroll accounting. For vehicles registered for the first time from 01.04.2020, the new worldwide WLTP measurement procedure (or WMTC) will generally apply instead of the previous European NEFZ measurement. This procedure typically results in significantly higher CO2 emission results. For this reason, a new CO2 table has been created for the classification of benefits in kind.

For the application of the correct CO2 table, a distinction must be made:

• For motor vehicles first registered from 01.04.2020 onwards, for which a WLTP or WMTC value is shown in the type approval certificate, a new CO2 table applies.
• For motor vehicles first registered before 1st April 2020, or for which no designated WLTP or WMTC value exists (this generally affects outgoing series that were still measured according to the NEFZ procedure), the old CO2 table will continue to apply.