Private car or company car - Information on taxation

Owning your own car means freedom, but it often makes the tax return more complicated than expected. Who actually pays the motor vehicle tax? How much can you really deduct for your commute? And what is the 0.9% rule for company cars?

In Switzerland, every canton has its own rules when it comes to calculating car values and deductions. So that you don’t give away money and avoid tax traps, we have summarised the most important facts for you. We show you how to declare your car correctly and why models like car subscriptions can save you a lot of paperwork.

Who Must Pay Motor Vehicle Tax in Switzerland?

Before we get to entering it in the tax return, one important point must be noted: the motor vehicle tax. Since it is considered a fee for road use, it does not appear in the regular tax return. It is paid directly to the road traffic office and cannot be claimed as a deduction.

Payment and Responsibility

The tax is usually due annually in advance (mostly in January). The person registered as the owner in the car registration document is responsible for payment.

Affected Vehicles

The tax applies not only to passenger cars, but also motorcycles, mopeds, quads, minibuses, motorhomes, trucks, tractors, and trailers.

Cantonal Differences in Calculation

Since the tax authority lies with the cantons, the amount of the charge varies greatly depending on the place of residence. The calculation bases also vary widely and are based, depending on the canton, on different factors or combinations thereof:

• Engine capacity (e.g., Canton of Zurich)

• Total weight (e.g., Canton of Bern or St. Gallen)

• Power in kW/HP (e.g., Canton of Aargau or Geneva)

• CO₂ emissions (integrated as a bonus/malus system in many cantons)

For reliable information, it is advisable to use the online calculator of the road traffic office of your canton of residence.

Special Case: Car Subscriptions

Unlike a leasing rate, the subscription fee already includes the motor vehicle tax. Instead of worrying about the motor vehicle tax, you can simply focus on our cars and discover your desired vehicle here.

How Can I Correctly Declare My Private Car in Switzerland?

If you own a car, it legally counts as part of your taxable assets. This means you must declare the value of your car in the assets section of your tax return. The value years after purchase is easiest to determine using the so-called tax value (residual value). While you could theoretically estimate this via online valuation portals, the cantons provide specific depreciation rates, offering a much simpler solution.

The Depreciation Rate: How to Calculate Your Tax Value (Residual Value)

In Switzerland, the cantons provide tables or flat rates to represent the annual depreciation of your car in a straightforward way. Since the tax authority lies with the cantons, the practice differs significantly depending on your place of residence:

• Canton of Zurich: Here, a degressive depreciation rate of around 40% of the respective residual value is often applied in practice.
  This means the taxable value decreases particularly quickly in the first years.

• Canton of Bern: Bern uses a detailed yearly schedule.
  In the year of purchase, you must declare only 65% of the original purchase price excluding VAT.
  Afterwards, the value decreases continuously: in the second year it is 42%, in the third year 27%.
  After a total of 7 years, your car is usually valued at CHF 0 or a symbolic amount for tax purposes.

• Canton of Lucerne: In Lucerne, the usual depreciation rate is 30% per year, calculated on the residual value of the previous year.

• Other Cantons: Nationwide, rates vary widely and are mostly in a range between 20% and 60%.
  According to experts (e.g., K-Tipp), it is worth checking the guidelines of your tax return to minimise your justified expenses for tax purposes.

Example Calculation: If you bought your car for CHF 40,000 (including VAT), the taxable value in the following year with a 20% linear depreciation is CHF 32,000. Using the degressive method in the Canton of Zurich (40%), the value would already fall to CHF 24,000 in the first year. After a few years, the value reaches zero, even if your car still has a considerable resale value on the used market.

Special Case: Cars That Increase in Value, Leased Cars, and Car Subscriptions

It is different if a car increases or remains stable in value. For vintage cars, collector cars, or limited edition sports cars, the actual market value must be declared. A flat-rate depreciation is not permitted in such cases, as this could be considered tax evasion. It is therefore recommended to have a professional valuation carried out to transparently prove the current value to the tax authorities.

Both car subscriptions and private leasing benefit from the fact that you are not the legal owner of the vehicle.
This greatly simplifies your tax return:

• No taxable assets: You do not have to declare the car in your assets section.

• No administrative effort: You save calculating depreciation rates or tax values, which would be required annually for a purchased car.

Which Deductions Are Possible When Declaring a Private Car in the Tax Return?

Costs for journeys between home and workplace are generally considered private. Nevertheless, the law allows deductions as professional expenses under certain conditions.

The Hurdles for Car Deductions

To deduct the costs for a private car, you must prove that using public transport (PT) is unreasonable. This is usually the case if:

• Time savings with the car compared to PT are at least one hour per day.

• You rely on the car for health reasons or to transport heavy tools (over about 10 kg).

• Your workplace is simply not accessible by PT (e.g., remote locations or night shift work).

Maximum Deduction Amounts

For direct federal tax, the deduction for commuting has been capped at CHF 3,200 since 2024 (from 2026, this cap will rise to CHF 3,300).

The cantons have their own leeway here:

• While Valais generally allows unlimited deduction of costs,

• the Canton of Zurich caps the deduction at CHF 5,000.

Calculation is usually done with a flat rate of 70 to 75 cents per kilometre driven.

How Is the Private Use of a Company Car Taxed in Switzerland?

A company car provided by your employer is considered part of your salary – a so-called monetary benefit. Since you also use the car privately (e.g., for shopping, holidays, or weekends), you must pay tax on this benefit.

Calculating the Private Use

Private use is usually taxed at a flat rate. Since January 2022, a rate of 0.9% of the car purchase price (excluding VAT) per month applies – regardless of whether the car is bought, leased, or provided via a car subscription. The official list price is always relevant, not the monthly leasing or subscription fee. With this increased percentage, commuting is fully covered, including private use of company cars.

Previously, employees had to separately account for the commute as income or declare it in the tax return – this additional burden is now eliminated with the 0.9% rule. Conversely, no travel costs can be deducted as professional expenses.

A minimum amount of CHF 150 per month applies. For example, if the car costs only CHF 15,000, 0.9% (CHF 135) is not applied; instead, at least CHF 150 per month (CHF 1,800 per year) is added as notional income.

How Does the 1% Rule for Company Cars Work in Switzerland?

In border areas or through German media, the “1% rule” is often mentioned. It is important, however, that in Switzerland there is no 1% rule, but the 0.9% rule.

Why 0.9% of the Purchase Price?

Since 1 January 2022, the monthly rate has been increased from 0.8% to 0.9% of the purchase price (excluding VAT). The aim of the increase was to cover commuting costs between home and workplace on a flat-rate basis.

This eliminates the tedious kilometre accounting for commuters in the private tax return – private trips and the commute are settled with a single flat rate.

Example Calculation:

• Purchase price (excluding VAT): CHF 60,000

• Monthly private use (0.9%): CHF 540

• Annual taxable amount: CHF 6,480

Declaration and Charges:

This amount is shown on your salary certificate under box 2.2.
Since the private use is legally considered in-kind salary (monetary benefit), it is subject not only to income tax but also fully to social security contributions (AHV/IV/EO/ALV and usually pension fund).

Additionally, the employer must tick box F on the salary certificate to confirm that the commute is covered.

Salary Certificate and Forms: Understanding Box F and Box 2.2

The salary certificate is the relevant document for your tax return.
Mistakes often creep in here, leading to unnecessary additional payments or queries.

Box F: Free Transport

It is essential to check box F (free transport between home and workplace). If a company car is provided, the employer must tick this box. This signals to the tax office that you can no longer claim commuting costs as deductions, as the commute is already covered by the flat rate.

Box 2.2: Private Use

The annually calculated amount (e.g., CHF 6,480 from our example) is entered here. This increases your taxable gross income as well as the relevant salary for social security contributions.

Exclusively Business Use

If the car is used strictly for business purposes and any private use (including the commute) is prohibited, box 2.2 remains empty and box F is unticked. In this case, tax authorities often require strict proof, for example through a detailed logbook or a corresponding clause in the employment contract.

Logbook vs. Flat Rate: What Pays Off for Privately Driven Kilometres?

The 0.9% flat rate is not always the cheapest option. If you use the car almost exclusively for business and only drive very few kilometres privately, a logbook can save taxes.

The Effort of a Logbook

The requirements are high: every trip must be documented in detail – with date, start and destination, mileage at start and end, and the exact purpose of the trip (business or private).

• Advantage: You only pay tax on the kilometres actually driven privately. Disadvantage: The administrative effort is enormous.
  Moreover, incomplete or implausible entries often lead the tax office to reject the logbook and instead apply the full 0.9% flat rate.

• Conclusion: For the vast majority of employees, the flat rate is the better option. It provides full legal certainty and saves the daily documentation effort, as commuting is already included.

Tax Advantages and Disadvantages of Electric Company Cars

Companies are increasingly focusing on sustainability. But which tax peculiarities apply to electric cars?

Advantages for Employers

Many cantons promote electromobility through reduced or completely waived motor vehicle taxes. Installation costs for charging stations at the workplace are fully deductible as business expenses.

However, it should be noted that since 2024, the regular automobile tax of 4% applies again on imports. Here you can find out how to correctly declare your company car.

Considerations for Employees

Since electric cars are often more expensive than comparable combustion vehicles, the base for calculating the private use (0.9% of purchase price excluding VAT) increases. In Switzerland, there is no reduced tax rate for electric cars.

An important point is charging costs: if the employer covers electricity costs for home charging, up to CHF 60 per month can be provided as a tax-free expense allowance.

Higher reimbursements or the financing of a private wallbox, however, count as taxable salary.

Conclusion: Navigating the Tax Jungle

Correct taxation of your car in Switzerland requires attention, especially when distinguishing between business and purely private trips. While private cars primarily benefit from clever commuter deductions, company cars offer a straightforward flat rate through the new 0.9% rule, although not always cheaper.

Those seeking maximum flexibility and minimal administrative hurdles will find car subscriptions the most modern solution to today’s tax questions. You pay a fixed price and do not have to worry about motor vehicle tax or tedious depreciation tables.

Ready for your new car without tax stress? Check out the selection at Carvolution and find your suitable car subscription!

Disclaimer: This article is for informational purposes and does not constitute tax advice. For binding information, please contact the cantonal tax office or a qualified fiduciary.