Neustadt an der Weinstraße – September 11, 2026 -- Employees who skip a free company car and drive their own vehicle for business trips can lose the right to deduct those travel costs from their taxes, Germany's Federal Fiscal Court (Bundesfinanzhof, BFH) has ruled.
An employee tried to deduct nearly 3,800 euros in private car expenses
The case centered on a worker who had access to a company car that he and his wife were also permitted to use privately. Despite this, he took his own car for three business trips and claimed roughly 3,800 euros in travel costs as work-related expenses on his tax return.
The local tax office rejected the claim, but the man sued and won at the Lower Saxony Finance Court. The tax office then appealed, sending the dispute to the BFH for a final decision.
Judges said the wife's use of the company car was a private motive
The BFH found that during the employee's business trips, his wife used the company car instead. Judges classified this as a purely private motive and ruled the resulting costs unreasonable, especially since the employee would have incurred no travel expenses at all had he used the company car himself.
The court emphasized that when employees choose a private vehicle over a free company car, the underlying reason matters. If a reasonableness test shows the choice was driven mainly by personal interests, the associated costs cannot be claimed as tax deductions.
As a result, the BFH overturned the Finance Court's earlier ruling and denied the deduction entirely (BFH ruling VI R 30/24).
Without a company car, private travel costs remain deductible
The court noted the outcome would differ for employees without access to a company vehicle: fuel and mileage costs for business trips in a private car can still be claimed as work-related expenses if the employer does not reimburse them.