Good news! As of 1 January, reporting of deemed income for employees with company cars just became easier. - Tax and Legal blog


As of January 1, 2022, deemed income for personal use of a company car will be increased from 0.8% to 0.9% per month of the acquisition price of the car, excluding VAT. Employers will no longer need to declare the percentage of external service in the salary certificate and company car beneficiaries will not have additional taxable income added to their tax assessments over and beyond the 0.9%.

This change is basically good news for employers and employees alike since it will simplify payroll reporting and prevent surprises when receiving final tax assessments.

The Financing and Expansion of Rail Infrastructure Act (German abbreviation “FABI”) that was adopted in 2016 had as one of its financing mechanisms a reduction in allowable commuting deductions to and from work. This change meant the tax liability for employees without company cars increased. The government decided that those with company cars travelling similar distances should also have an additional tax burden, otherwise company car beneficiaries would be treated more favourably. Also one of the stated goals of FABI was to incentivise all commuters to use public transportation instead of personal motor vehicles.

Before the new rules, company car deemed income amounted to 0.8% per month of the acquisition price, excluding VAT.

After FABI became law in 2016, the administration decided that CHF 0.70 per kilometre needed to be added in the tax return on company car commutes exceeding a certain number of kilometres. The offset could however be reduced by external service (e.g. when travelling directly to a client without first going to one’s habitual place of work). The employer had to calculate and declare this percentage in their employee’s salary certificate.

These rules proved complicated for all parties (employees, employers, and even for cantonal tax administrations). Already, as of 2018, the Federal Council tasked the Federal Tax Administration with proposing a new solution.

The new solution, valid as of 1 January 2022, provides that deemed income for the private use of a company car is increased from 0.8% to 0.9% per month of the acquisition cost, excluding VAT. In return, travel costs between place of residence and place of work will no longer be taxable. Moreover, employers are no longer obliged to calculate and declare the proportion of external service in the salary certificate.

Basically, this new regulation reduces the effort for all involved. However, for employees with a very short commute to the place of work or for employees who regularly travel directly to clients, this new regulation may generate additional taxable income, which was not the case with the old solution. Furthermore, this additional income of 0.1% per month of the acquisition price excluding VAT is subject to social security contributions. The minimum deemed income remains an amount of CHF 150 per month  where the purchase price of the car, excluding VAT, is equal to or less than CHF 16,667.

Deloitte's view

This solution is advantageous for both employers and employees. It also reduces the administrative burden for the tax authorities. However, it also means that less tax revenue will be generated for financing and expanding rail infrastructure and reduces the incentive on commuters with company cars to switch to public transportation.

The increase of 1.2% per year from the acquisition price without VAT is very moderate. Given this moderate increase the additional income subject to social security contributions as well as the additional taxable income for people with a very short commute or for those who regularly travel directly to clients is justifiable in our view. If an acquisition price of CHF 35,000 is assumed, the social security and taxable income increases by CHF 420 per year.

Finally it should be noted that in view of the new ways of working as a result of COVID these rules might be modified further in the near future.

As this new regulation comes into force on January 1, 2022, payroll departments should take care to calculate and report the correct amounts for January. In addition, we would recommend that employers inform employees with company cars about this change.

Key contacts


David Wigersma - Partner, Global Employer Services

David has 20 years of experience in the area of international corporate and individual taxation planning. He specialises in addressing the complex compliance needs of a cross-border workforce with varied elements of compensation.


Dominique Frison110x110

Dominique Frison – Senior Manager, Global Employer Services

Dominique works as a Senior Manager in the Global Employer Services (GES) Practice for Deloitte Switzerland. He has more than 10 years of experience as an individual tax specialist and focuses on tax at source as on payroll and shadow payrolls topics. Before he joined Deloitte, he worked as a tax commissioner for the tax authorities of the canton of Zurich. Dominique is a certified fiduciary and holds an Executive MBA in international individual taxation.



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