Almost one in ten taxpayers in Östersundom uses the car benefit provided by the employer. The most expensive company cars are driven in Kuusisaari and Lehtisaari, Tammisalo and Westend.
Abundant eight thousand euros per year.
It is a typical amount paid by a Finnish company driver as a tax value for a car benefit provided by an employer.
In many areas, however, the tax value of the car benefit is significantly higher.
For example, in the Helsinki Tammisalo postcode area 00830, the median amount of tax value paid for a car benefit is 10,715 euros per year.
Car benefit, in short, means that an employee is allowed to use a car managed by the employer for his or her private trips. The price of a company car may vary, for example, depending on whether or not fuel and maintenance costs are included in the car benefit.
Whatever model is chosen, the car benefit is always paid as a tax value that raises the employee’s overall tax rate.
HS found out how and where car benefits are used in Finland.
Industrial automotive focuses almost invariably on areas with the highest incomes in the country. This is clear from the Tax Administration’s databases.
For example, in the Westend postcode area of Espoo (02160), the median amount of the tax value of the car benefit in 2019 was 10,140 euros, which was the third highest in the whole country.
In the same year, the median income of the area’s inhabitants was Finland’s top position with EUR 48,947.
The car benefit, on the other hand, was used most in Helsinki’s Kuusisaari and Lehtisaari postcode area (00340), where the median tax value was 10,740 euros. In the income comparison, the region ranked eighth.
The exception in the busiest areas of company cars was Östersundom, located on the border of Helsinki and Sipoo. In the income comparison, the region was ranked 48th in the country as a whole, but the median amount spent on car benefits was the fourth highest in the country.
When calculating the share of car benefit recipients of all taxpayers in the postal code area, the ratio was the highest in Finland. In Östersundom, almost one in ten taxpayers used the car benefit provided by the employer. The second most common use of the advantage is in Westend, Espoo, and the third most common in Sundsberg, Kirkkonummi. These areas are also the most profitable postal code areas in Finland.
See the HS counter for how to use car benefit in your own zip code area:
With a company car ie car benefit means a car owned or managed by the employer, the use of which is taxed by the employee according to the tax value calculated by the Tax Administration.
The value of the car benefit is added to the employee’s taxable income. For example, an advantage of € 8,000 increases the employee’s taxable income by the same amount, in which case he pays more income tax.
The value of the benefit is affected by whether the free car benefit is only a car benefit. Free car benefit is a slightly more expensive option where the employer pays all the costs of using the car.
The operating advantage, in turn, means that the employee bears the costs of fuel and other propulsion. Nearly three-quarters of all company car users enjoy free car benefits, says a transport specialist Hanna Kalenoja From the Automotive Information Center.
The consumer can calculate the Tax Administration with car alarm counter, the cost of using the employer ‘s car benefit. The price is mainly determined by the age and purchase price of the car, as well as the average operating costs and the value of accessories determined by the Tax Administration.
Car tax value the median is calculated in statistics for postal code areas with at least 50 car benefit users. For example, in the Helsinki Metropolitan Area, the smallest median amount of benefit was in Kannelmäki, Sörnäinen and Länsi-Pasila, where the median was less than 6,600 euros per year. With this tax value, a car introduced in 2020, for example, with a recommended price of 23,000 euros and a value of accessories of one thousand euros, would be available as a free car benefit.
With a tax value of more than 8,000 euros, you would already have access to a car that costs 33,000 euros with new accessories for a thousand euros. With a tax value of ten tonnes, the price of a car could already be 44,000 euros with a thousand euros of equipment.
However, you can get a discount on the value of the car benefit if you choose a fully electric car as your vehicle. The government decided in the autumn budget debatethat the tax value of all-electric cars will be reduced by EUR 170 per month for the period 2021-2025.
In addition, the tax value of the free car benefit for fully electric cars is reduced by 120 euros per month due to lower operating costs.
See on the map how the car benefit was used in the Helsinki metropolitan area:
When looking at the median value of the car benefit, many residential areas in Helsinki are at the top. The relative share of car benefit recipients, on the other hand, is highest in many Kirkkonummi postal code areas.
For example, in the Sundsberg postcode area, Kirkkonummi, in the 2019 comparison, Finland had the second highest median income in Finland. The share of company drivers among all taxpayers was also the highest in the country (8.2 per cent).
Also in Espoo, several postal code areas are ranked nationally in terms of both the median value of the car benefit and the relative share of the use of the benefit.
About ten thousand Espoo residents use the car benefit through their employer or their own company.
One of them is Elina Koivumäki, who works as a lawyer and entrepreneur in his law firm and as a founding partner in a startup company.
He was a long-time partner in a large law firm, when he drove a company car purchased for the company, which he later acquired. Today, he owns a Tesla all-electric car acquired through his own company.
“The biggest incentive to get a company car was that in a leased car, I don’t have to take care of maintenance and other practical matters myself. In addition, I wanted a fully electric car for environmental reasons, ”says Koivumäki.
He has heard of a discount offered by the government on the tax values of all-electric cars, but when the current car was acquired in 2018, one was not yet in use. However, Koivumäki estimates that the tax advantage acts as an incentive to choose an electric car instead of an internal combustion engine car.
Koivumäki does not state the exact leasing price and tax value of his car due to privacy protection, but says that it is clearly higher than the Espoo average, which is a little over 8,000 euros a year.
He says that in connection with the acquisition of the current car, he has clarified to some extent whether the acquisition of a proprietary car as a whole is cheaper than a car offered by a company lease and a private lease.
“My understanding is that the difference is quite small between the different leasing options. Of course, there are some tax benefits associated with a company car: my home has a Tesla wall charger, the consumption of which I can reduce from my home’s electric bill when I charge a company car, ”says Koivumäki.
At home corners in the Suur-Tapiola area, Tesla’s electric cars are reportedly strikingly common, and company cars are quite common in Koivumäki’s acquaintances.
In Finland At the end of 2019, there were approximately 2.7 million passenger cars in use. There were about 75,000 of these company cars.
A cross-income analysis shows that car benefits are used relatively little among low- and middle-income earners.
In 2019, more than 80 per cent of all car benefit users fell into the category of total capital and earned income of at least EUR 50,000, according to the Tax Administration’s statistics. More than one hundred thousand earners were 15.8 per cent and those earning more than 150,000 euros were still just over six per cent.
It is also reflected in the recommended prices of company cars.
“The range is large, but typically the cars represent at least the middle class, and small city cars are not usually acquired as company cars, as company cars are especially preferred by those who do mobile work,” says Hanna Kalenoja from the Automotive Information Center.
On the other hand, he emphasizes that talking about car benefits can give the false impression that it is an advantage for the motorist to get an expensive car at a lower price than usual.
“The taxpayer’s perspective is that the tax value of a car benefit must match the real cost of motoring. Therefore, the level of tax value is redefined every year. In addition, for an ordinary motorist, acquiring a car can even become a little cheaper with an installment than through an employer with a leasing agreement, ”says Kalenoja.
According to him, the taxpayer does not take a position on what kind of benefits companies offer to their employees – as long as a realistic price can be calculated for the benefit. In addition, the taxpayer closely monitors the types of vehicles that companies procure.
“It can be difficult for a small business owner to get a car for their company without it being a company car,” says Kalenoja.
What about why is the use of car benefits almost invariably concentrated in the same residential areas where residents earn the most?
“The high tax values of car benefits, especially in the Helsinki metropolitan area, may be explained by the fact that, according to employment statistics, there are a particularly large number of employees working in the area as managers,” says the economist. Aki Savolainen About the tax administration.