Company cars and their use for private travel became an issue once again with the introduction of the Financing and Expansion of Rail Infrastructure (FABI) framework in 2015. The administrative hurdles involved will be reduced again from 2022. For this reason, we would like to address the topic of company vehicles once again and explain how to declare the private share of such vehicles correctly.


What is the purpose of the private share?

The costs associated with a company car are generally paid by the company. However, private expenditure must not be booked as a company expense. In reality, the distinction between business and private use is not always clear – specifically, this applies when a company car is provided to an employee who uses or may use it for private journeys. In such instances, the question is how to divide up the business and private costs.

The authorities have specified flat amounts for such cases. These amounts make it easier for taxpayers and the tax authorities to determine the correct share of the costs for private use. They are also accepted by the OASI, and by extension other social security agencies. Taxpayers can choose between two calculation methods:

Calculation based on actual use: A log is maintained for every kilometre driven in the vehicle, specifying whether the travel was for private or business purposes. For business travel, the destination and purpose must also be specified. As this method involves a lot of additional effort, it is seldom used in practice.

That is why the flat-rate calculation method detailed below is also available:

Flat-rate calculation: A flat rate based on the purchase price is applied. This rate takes account of both vehicle maintenance costs and payment instalments. The purchase price includes all additional features.


Connection with FABI

Each year, taxpayers declare their salary in their personal tax return, and can deduct work-related expenses from this amount. One such work-related expense is the cost of commuting to and from work. If the employee is given a company car, a distinction must be drawn between the following three cases:

A: The employee is permitted to use the car for business travel, commuting and other private travel (commuting is considered private travel). Box F must be ticked in the salary statement (the employee may not deduct the costs of commuting as a work-related expense). In addition, the share of the car used for private purposes (see above) must be added to the employee’s salary as a payment in kind.

B: The employee is permitted to use the car for business travel and commuting, but not for other private travel. In this case, it is not necessary to deduct a private share, but Box F must still be ticked, and the employee may not claim a deduction for commuting.

C: The employee is only permitted to use the car for business travel, and the car is parked at the workplace. In this case, it is not necessary to calculate a private share or tick Box F on the salary statement.

Furthermore, a limit on the deduction for work-related expenses was introduced with FABI, i.e. employees who commute long distances can only deduct a portion of their expenses.



If the distance commuted is 25 km x 2 trips per day x 220 working days x CHF 0.70 per kilometre, the annual cost is CHF 7,700.

However, the deduction for work-related expenses is limited (currently to CHF 3,000 for federal taxes).

If, in the example above, the employee is provided with a company car (examples A and B), a payment in kind must be declared in the employee’s tax return. That results in higher taxable income. In our example, this means:

Addition to taxable income                                      CHF 7,700

Permitted work-related deduction                       CHF 3,000

Net addition to taxable income                               CHF 4,700


However, such a flat-rate addition disadvantages those employees who do not commute (field sales representatives or employees who work partly from home). To prevent this, the portion used for sales-related work must be shown in the salary statement. This requires checks on whether and when employees travel between their home and place of business. Because this is very time-consuming, the tax authorities have published a list of flat percentage rates for field work in certain activities – although these by no means cover all employment relationships. In short, the current rules are very unsatisfactory.


What is changing from 1 January 2022?

In order to reduce the associated administrative burden, the private share is being increased.

Old rule:

0.8% of the vehicle purchase price (excl. VAT) per month, or 9.6% per year

New rule:

0.9% of the vehicle purchase price (excl. VAT) per month, or 10.8% per year

As a result of this change, the payment in kind for commuting is also subject to social security contributions.



The simplification is intended to reduce the administrative burden on employers and restore the equal treatment of employees. In return, the private share has been increased, which has the effect of slightly raising employees’ income that is subject to tax and social security contributions.

All in all, the change should be welcomed as a pragmatic and practical solution to resolving unequal treatment.

This information is intended to provide you with a general overview. We would be pleased to assist you if you have any specific questions. Please get in touch with our client advisors.