Prima facie evidence of private vehicle use by managing directors II

Despite the ban on private use, there is prima facie evidence of private vehicle use by the shareholder-managing director, at least in the context of a concealed profit distribution.

Following the Cologne Fiscal Court, the Münster Fiscal Court also dealt with the use of a company car by a shareholder managing director and came to a similar conclusion: In the case of a sole shareholder managing director, there may be prima facie evidence of the private use of a company car leading to a hidden profit distribution (vGA) even if a ban on private use was agreed in the employment contract. The tax court also determined that the hidden profit distribution should not be assessed according to the 1 % rule, but according to arm's length principles, which would have led to an even higher recognition of private use, at least in the case in dispute.

In each case, however, due to the prima facie evidence, the VGA meant that no special depreciation was possible on the vehicle because the special depreciation requires a business use of at least 90 %. However, the tax office and the court assumed a private use of 50 %. In light of this and other rulings, shareholder-managing directors should therefore not only agree a ban on private use, but also document its implementation through suitable measures (logbook, etc.) in order to avoid a nasty surprise later on.