Cost cap regulation in the case of a special leasing payment

In order to determine the total cost of a company car under the cost cap rule, a special leasing payment must be allocated to the entire leasing period in accordance with the accrual method.

In the event that the amounts to be assessed for an entrepreneur's company car in accordance with the 1 % rule exceed the total costs for the vehicle in the respective year, the tax authorities grant a cost cap for reasons of equity. The amounts for private use and for journeys between home and work must then be set at no more than the total cost of the vehicle. However, these total costs also include the pro rata special leasing payment in the case of income-surplus accountants. Even if this is fully deductible as a business expense in the year in which it is paid, the Federal Fiscal Court has confirmed the opinion of the tax office that the special payment for determining the notional total costs of the vehicle must be distributed over the individual years of the leasing period on an accrual basis.