The Company Car as Compensation in Species is a fairly common consultation to our labour consulting dept.
The Statute of the Workers establishes as salary, the totality of the economic perceptions received by the worker, for the professional rendering of services. Either in cash or in species. And without the latter being able to exceed 30% of the worker’s salary payments.
The company car as compensation in species. Vehicles in general
Within the remuneration in species, one of the most commonly used by companies is the use or delivery of vehicles to workers.
These incomes in species must be imputed to the payroll according to the following rules:
- If the vehicle is handed over (ownership of the vehicle would pass to the worker), the acquisition value for the payer, including taxes, must be imputed.
- If there is a right of private use, on the total valuation of the vehicle, 20% of this will be taken. Of which the proportional part of the use made by the worker of the vehicle for personal purposes will be included as payment in kind in the monthly salary receipt.
Calculation example.
Vehicle with a RSP: 25.000€.
Imputation: 25.000€ x 20% = 5.000€
- If you make a 100% private use. The employee will see the amount of €416.66 (€5,000/12months) reflected monthly on his or her payslip as payment in kind.
- If you make a mixed use. That is to say, you use the vehicle for professional purposes and additionally you have authorization to make a private use. An objective evaluation of the percentage of personal use of the vehicle must be carried out.
On the previous example.
If it is determined that the private use of the vehicle is 50%, in this case the imputation as payment in kind would be:
5000€ * 50% = 208,33€ per month
12 months
If, after use, the vehicle is delivered. The full amount of the market value at the time of delivery to the employee (transferring ownership of the vehicle to the employee) would have to be imputed as payment in kind.
In cases where the vehicles subject to payment in kind belong to companies whose main activity is the transfer of the use of motor vehicles (e.g. renting). The cost of valuing this remuneration must be at least the average retail price. Following the criteria set out in the previous point.
The company car as compensation in species. Efficient vehicles.
In all cases of transfer of the vehicle for the employee’s private use, on the criteria to be taken into account for imputation as compensation in species, on the total of the same may be reduced by 15, 20 or 30%, in the case of efficient vehicles and meets the following criteria set out in the Personal Income Tax Regulations (IRPF in Spanish):
- 15% in the case of vehicles that comply with the Euro 6 emission limits provided for in Annex I to Regulation (EC) No 715/2007 of the European Parliament and of the Council of 20 June 2007, their official CO2 emissions do not exceed 120 g/km. And the market value that would correspond to the vehicle if it were new, before tax, does not exceed 25,000€.
- 20% when, additionally, they are hybrid vehicles or vehicles powered by internal combustion engines that can use alternative fossil fuels (auto gas and natural gas). Provided that the market value of the vehicle, if new, before tax, does not exceed 35,000€.
- Finally, 30% in the case of battery-powered or extended-range electric vehicles. Or plug-in hybrid electric vehicles with a minimum range of 15 km. Provided that the market value of the vehicle, if new, before tax, does not exceed 40,000€.
In conclusion
When a vehicle is made available to the worker for private use, the imputation calculations for personal use must be carried out. Including the corresponding amount for compensation in species in your salary statement. In accordance with the criteria set out in this informative note.
Arrabe Integra
Labour Consulting
