Accident by motor vehicle in Germany

If you have an accident with a private or commercial car, the costs incurred may be subject to tax deduction in your tax return.

For this to be possible, the context in which the journey was made is of great importance, regardless whether it was a private vehicle or a service car, and whether the journey was for professional or private reasons. Since many tax pitfalls lurk here, some individual cases and their effects on your tax return are listed below.

Accidents during a Professional Trip (Private Vehicle)

Professional trips such as trips made for an external business activity, can lead to the possibility of deduction of the cost of an accident which occurs during the trip. However, this only applies to the difference between the total cost of the accident and the payments made by an insurance company. You can enter the repair costs as professional costs on Appendix N of your tax return.

Accidents during a trip between home and work (Private Vehicle)

If an accident occurs while you are on the way to the workplace or from home, the accident costs can usually be claimed as an extraordinary expense alongside the usual mileage allowance. The same also applies to home trips with a double budget management. Extraordinary expenses to be claimed include; repair costs both for your own vehicle and also for the other vehicle. In addition, the cost of impairment of the car should not be taxed. This also includes, the fees for a rental car as well as attorney and legal expenses and even expenses for experts. If you need to take loan or a mortgage to remedy the damage, you may even provide the loan interest in your tax return.

Professional trips (With the Company Car)

If you have an accident with the company car on your way from or to work or to an external activity, then there is no financial advantage. If your employer pays for the damage, he can specify these costs as operating expenses in the tax declaration of the company. If you have to settle the damage, this will be treated as in the above-mentioned case, i.e. as professional expenses which you enter in Appendix N of the tax declaration.

Accidents during private trips with the company car

If you have an accident during the private use of your service car, you must pay compensation to your employer. However, if this does not apply, then it is a valuable financial advantage that you have to pay tax on.
If a third party caused the accident, then you do not have any obligation to pay compensation, and there is therefore no financial advantage for your employer.