If you use a car—or any other vehicle—in your business, it is likely one of your most important tools. Similarly, the expenses related to your vehicle and the business trips made with it are one of the most important areas that need to be properly documented in your business operations.
As a user of our business name service—or if you’re still interested in the service—please take note of the points listed below to ensure your vehicle is properly accounted for so that you can get the most out of it.
Adding car information
Add your car's details to the app under " Car Details " (found in the Menu). Include your car's license plate number, the percentage of time the car is used for business purposes (more than or less than 50%), and the car's registration document.
If you purchased your car more than a year ago, please attach a valuation report as documentation. You can obtain a valuation report from any car dealership or, for example, the Alma Ajo online service. The valuation must include the car’s registration number, the estimated value (amount in €), the odometer reading at the time of the valuation, and the date of the valuation. You can find this information, for example, in the Timeline section of the Alma Ajo service.
If you purchased your car less than a year ago, please attach the bill of sale or installment agreement as documentation. This document must include the car’s registration number, the date of purchase, and the purchase price in euros.
What are the benefits of using a car?
This depends on how much you use your car for business trips. The aforementioned information on car usage is therefore important.
If you use your car for business purposes more than 50% of the time—that is, if you drive it more for business than for personal use—the tax authorities will consider your car to be a vehicle belonging to your business. In this case , your car and related expenses, such as fuel, car washes, and maintenance, are reported as business expenses on your annual tax return.
If you use your car for business purposes less than 50% of the time —meaning you use it more for personal travel—the tax authorities will consider your car to be your personal vehicle. In this case, you must claim mileage reimbursements based on your logbook when filing your annual tax return.
An important part of this is the driving log, which determines the ratio of company and personal driving. This information is necessary in order to meet the requirements of the Tax Administration.
Keeping a driving log
You can only deduct expenses related to your vehicle if you have kept a logbook of your work hours in accordance with the tax authority’s guidelines. If you drive a lot, keeping a logbook may seem like a lot of work, but potential back taxes or other tax-related problems will certainly feel even worse.
The following information must be recorded for each individual work shift
- Start and end times of the trip (date and time)
- Start and end locations, and if necessary, the route taken (exact addresses)
- Driven kilometres
- Purpose of the trip
- Odometer reading at the start and end of the journey
- Driver information
- Kilometers driven by car during the year
The format of your driving log is up to you. You can record the information by hand in a notebook, in an Excel spreadsheet on your computer, or use an app designed specifically for this purpose. Our favorite is an app called Driversnote, which saves you a lot of manual work.
As a business owner, you must keep driving logs for at least 6 years.
Car expenses on your tax return
The useful life of a car is typically more than 3 years, and the purchase price exceeds 1,200 euros. For this reason, the car is reported on the tax returnwith an annual depreciation of up to 25%. The purchase price of the car is thus spread out over several years.
When the residual value (remaining value) is €1,200 or less, it can be written off in one go.
Driversnote
Driversnote is a driving log app that makes your daily routine much easier. All you have to do is tap "Start" at the beginning of your commute and "Stop" at the end—the app takes care of the rest. Only track work trips; do not record personal trips in the app at all. The percentage of personal driving is calculated based on the difference between your recorded work trips and the total mileage. So be sure to also enter your odometer reading into the app.
Once you’ve kept track of your work hours throughout the year, there’s just one task left. Create a report of your hours for the entire year. You must keep this report for at least six years. Report the mileage listed in the report on the tax return form we send you at the beginning of each year.
Pro Driversnoten Pro costs €11 per month, but if you sign up through us, you’ll get a 20% discount on the app .
- Log in or create a Driversnote account via this link to activate your discount.
- Please contact our customer service team via the "Support Requests" section of the app to receive an invitation link that will allow you to join the Truster team
Traditional driving logbook
If apps aren't your thing, you can also download a free driving logbook that you can fill out electronically or, more traditionally, print out and fill out with a pen.
Whether you’ve entered your mileage data into a logbook on your computer or written it down by hand throughout the year, please report your total annual mileage using the tax return form. We do not ask you to submit your logbooks. Keep them on file for at least six years in case the tax authorities wish to review them.