Private use of company cars: higher deduction

In Switzerland, taxation of the use of company vehicles must be on a flat-rate basis and must also include transport costs for travel to work

The taxation of the use of company vehicles for private purposes must take place on a flat-rate basis and must also include transport costs for travel to work.
The Federal Department of Finance is putting the amendment to the FDF’s Business Expenses Ordinance into effect on January 1, 2022.
For direct federal tax purposes, the adjusted ordinance governs that private use of a business vehicle (including expenses for commuting to work) may be taxed at a monthly rate of 0.9 percent of the purchase price of the vehicle.

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Until now, the flat rate has been 0.8%. As of January 1, 2016, transportation costs for commuting to work (without the external service fee) must be counted in the tax return as income at 70 centimes per kilometer.

3000 francs deductibility at federal level

Within the framework of direct federal taxation, these expenses are deductible as business expenses up to a maximum amount of CHF 3,000, while the cantons allow maximum or unlimited amounts according to their own legislation.
With the new regulation, the compensation of costs for the journey between home and work as well as the deduction of transport costs will no longer be allowed under direct federal taxation.

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In addition, the employer is no longer required to declare the share of work performed in the external service in the salary certificate.
However, despite the change it will still be possible in the future to count the actual private use with a logbook and to claim the deduction of transport costs.

No impact on direct tax revenues

In principle, the amendment of the ordinance has no impact on direct federal tax revenues.
Only minor additional revenue will result from value added tax and social insurance.
In order to ensure a uniform wage certificate, the cantons can implement the amendment of the ordinance within the scope of their own taxes.
As mentioned above, the cantons which apply an unlimited deduction or a deduction of more than 3000 Swiss francs for transport costs would have a small increase in revenue.

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Through the amendment of the ordinance, the FDF fulfills motion 17.3631, filed by the Transport and Telecommunications Committee of the Council of States (CTT-CS) and accepted by the Federal Chambers.
In 2019, the FDF conducted a consultation process regarding this amendment.
Six cantons, two parties, and 14 organizations endorsed the proposal. 20 cantons, two parties, and eight organizations rejected it.