OECD Taxation Working Papers

2223-5558 (en ligne)
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Working papers from the Centre for Tax Policy and Administration of the OECD that cover the full range of the Centre’s work on taxation with the main focus on tax policy related issues.

Personal Tax Treatment of Company Cars and Commuting Expenses

Estimating the Fiscal and Environmental Costs You or your institution have access to this content

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Michelle Harding1
Author Affiliations
  • 1: OECD, France

11 jui 2014
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Company cars form a large proportion of the car fleet in many OECD countries and are also influential in determining the composition of the wider vehicle fleet. When employees provided with a company car use that car for personal purposes, personal income tax rules value the benefit in a number of different ways. How accurate these rules are in valuing the benefit has important implications for tax revenue, the environment and other social impacts such as congestion. This paper outlines the tax treatment of company cars and commuting expenses in 27 OECD countries and one partner country. It compares these tax settings with a stylised “benchmark” tax treatment that estimates the full value of the benefit received by employees with company vehicles. The paper demonstrates that the estimated tax expenditures associated with company car taxation in these countries in 2012 can be quite considerable. Significantly, from an environmental perspective, in most countries employees faced no additional increase in tax payable in response to an increase in the assumption of distance driven.
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