Running a company car in Switzerland sounds simple – until the first questions come up: How much of the car can you deduct for business? How do you calculate the private use portion? And what's the deal with VAT? The short answer: you can deduct all costs attributable to the business share from your taxes – the private portion has to be calculated either at a flat rate or via a logbook, and added back. Which method pays off more depends on how much you actually drive for business. This guide walks through both paths with concrete CHF calculations, explains buying versus leasing, and shows you how to keep the admin burden to a minimum.

The key points at a glance

• The private use portion of a company car is determined either via a flat rate (benchmark values from around CHF 3,000 per year, depending on the vehicle's value) or via a logbook (actual business share as a percentage)
• Purchase price of CHF 45,000 → flat-rate private use of roughly CHF 6,000 per year – with an 80% business share, the logbook is usually cheaper
• Input VAT deduction only applies to the business share – and with flat-rate taxation (balance tax rate), not at all
• A logbook must be kept promptly, completely and without gaps – otherwise the tax authority won't accept it
• Leasing instalments are operating costs: a deductible business expense pro rata, depending on your business share

Buy or Lease: What Does a Company Car Really Cost?

Before you think about taxes, there's the financing question. Both routes have their own rules in Switzerland – and their own pitfalls.

When you buy, the car belongs to your business (or to you privately, if it's used for both). The purchase price isn't immediately deductible in full; it's spread over depreciation – typically 4 to 8 years for passenger cars, depending on the expected useful life. The VAT on the purchase price (for example CHF 3,645 at 8.1% on CHF 45,000) can be claimed as input VAT – but only to the extent of your business share.

When you lease, you pay a monthly instalment that you can deduct pro rata as a business expense. Input VAT on the leasing instalments is likewise only deductible up to your business share. The advantage: no big lump of capital tied up at the start, and the leased car doesn't appear as an asset on your balance sheet. The downside: at the end you own nothing, and contracts with low mileage allowances get expensive if you drive more than planned.

Marco, a carpenter in Thurgau, played out both routes. For his new company vehicle – a used VW Transporter at CHF 38,000 – leasing would have meant around CHF 520 per month over 48 months, plus a CHF 9,000 residual value. Because he wants to keep the car for at least eight years and drives a lot, he bought. After four years he has largely depreciated the vehicle, while his colleague with the identical leasing contract is still transferring CHF 520 every month – over CHF 3,000 more in total. The other way round, leasing would have been the better choice for Lena, a hairdresser in Bern: she only drives her Smart for business anyway, to clients and suppliers, doesn't want to tie up capital, and happily switches to a new model every four years.

The rule of thumb: Buy if you keep the car for a long time and rack up high mileage. Lease if you want to preserve capital and enjoy a new car. If you're toying with the idea of using a private car for business, our article on mileage allowances in Switzerland covers the alternative: CHF 0.70 per business kilometre driven, with no input VAT hassle.

The Private Use Portion: The Two Accepted Methods

The private use portion is the crux of the company car. The tax authorities' logic is simple: if your car is also used privately, part of the costs falls into your private sphere – and that part isn't deductible. There are two accepted methods for determining that share.

Method 1: The Flat Rate

With the flat-rate method, you don't calculate the private portion yourself; you use benchmark values set by the tax authority. For passenger cars, the rough rule is: 10% of the purchase price as private use per year, with surcharges for more expensive vehicles. The FTA's usual benchmark values for mixed-use passenger cars:

Worked example: You buy a car for CHF 45,000. The flat-rate private use is CHF 3,000 + 20% × CHF 15,000 = CHF 6,000 per year. You add this amount to your taxable income, or deduct it from the deductible car costs. The table shows benchmark values – you'll find the current rates at the FTA, and depending on the canton, separate flat rates apply for direct tax. If you're unsure whether your canton uses different values, check the current practice of your cantonal tax administration.

Method 2: The Logbook

With a logbook, you record every trip and calculate the actual business share at the end of the year. If you drive 80% for business, you can deduct 80% of all vehicle costs – fuel, insurance, maintenance, depreciation, leasing instalments, parking. The downside is the effort: the logbook must be kept promptly, completely and without gaps. A table reconstructed after the fact from calendar entries is regularly rejected by the tax authority – and then you fall back on the flat rate.

Worked example: The same car as above, CHF 45,000, total costs of CHF 12,000 per year (depreciation, fuel, insurance, maintenance). Marco drives 24,000 km for business and 6,000 km privately, so an 80% business share. Deductible: CHF 12,000 × 0.8 = CHF 9,600. With the flat rate, only CHF 12,000 − CHF 6,000 = CHF 6,000 would have been deductible. The logbook therefore gives him CHF 3,600 more in deductions per year – a tax benefit of roughly CHF 1,000 to CHF 1,800 depending on his marginal tax rate.

The rule of thumb: The higher your business share and the more expensive the car, the more the logbook pays off. If you drive roughly equally for private and business purposes, the flat rate usually gets you just as far – with none of the admin effort.

Keeping a Logbook – Without Hating It

A correct logbook needs, per trip: date, odometer reading at the start and end, route, purpose of the trip, and where applicable the company or person visited. You don't need the cost per kilometre or the time spent on every trip – the distance alone is enough. Three rules matter:

1. Prompt: Entries on the same day or shortly after. A logbook you "catch up on" in December for the whole year is practically worthless.
2. Complete: Every trip, including private ones and commutes. Private trips may be grouped into one block (just odometer reading and date), but the odometer readings must add up.
3. Without gaps: Odometer readings must form one continuous chain from the start of the year to the end.

Here's what a clean entry looks like:

Anyone keeping this by hand will have had enough by the third tax audit at the latest. A digital solution is more practical: apps record trips automatically via GPS, and you classify them as business or private in seconds afterwards. If you're already recording your expenses in software like Magic Heidi, a digital logbook export is the logical complement – the trips land exactly where your invoices and receipts are at year-end. That way the business-share calculation almost builds itself, instead of you spending a January afternoon wrestling with spreadsheets.

VAT and Input VAT: How to Get the Maximum Out

On the VAT side, there are two things to know. First: the input VAT deduction on the purchase price, leasing instalments and running costs is only possible to the extent of your business share. If you use the car 80% for business, you deduct 80% of the input VAT. The private portion doesn't qualify for input VAT – that's the consequence of mixed use. Our article on input VAT deduction in Switzerland explains the details.

Second: anyone using flat-rate taxation (balance tax rate) gets no input VAT deduction at all – on nothing, so not on the car either. That's an important factor in the decision between "balance tax rate or actual accounting" when larger purchases are due. We compare the pros and cons of the two methods in our guide to VAT accounting methods.

VAT worked example: Purchase price CHF 45,000 incl. VAT → VAT included CHF 3,375. At an 80% business share, you deduct CHF 2,700 as input VAT. At a 40% business share, it's only CHF 1,350 – and the flat rate (CHF 6,000 private use) is added back by the FTA on the income tax side anyway. The VAT question and the income tax question therefore run separately, even though both depend on the business share.

A word on records: keep the purchase contract, leasing contract, fuel receipts and garage invoices carefully. Under the Swiss Code of Obligations (OR Art. 957 f.), sole proprietorships with revenue under CHF 500,000 are entitled to simplified accounting – but even the simplified version needs complete records when the tax authority asks. You'll find details on accounting requirements at kmu.admin.ch.

Recording a Company Car Correctly for Tax: The Practice

To turn theory into accounting, you need a system that maps mixed use cleanly from the start. Concretely, that means:

• Run car costs as their own account group (depreciation or leasing, fuel, insurance, maintenance, parking, motorway vignette) – don't mix them with other business expenses
• Record the private use portion at year-end as a correcting entry – once with the flat rate, once from the logbook ratio
• Document the logbook ratio: total km, business km, resulting percentage – this calculation belongs in your annual folder
• Book the VAT correction separately from the income tax correction

Do this in spreadsheets and you'll spend a few hours every year copying and summing. Use accounting software and it happens on the side. Magic Heidi was built for exactly these everyday situations: record expenses, check categories, separate the VAT share – and at the end of the year the car cost overview is ready, the one your fiduciary can check in five minutes instead of five hours. It costs CHF 25 to 39 per month – less than half of bexio, which charges CHF 52 for the same feature set. The comparison is worth it: Magic Heidi as a bexio alternative.

If you've only recently gone self-employed and want to sort out the basics of VAT liability, start with our guide to VAT for freelancers.

What Else the Self-Employed Can Deduct for a Company Car

Beyond the obvious costs, there are a number of items the self-employed tend to forget – which together add up to a few hundred francs a year:

• Parking at your workplace (pro rata to business share)
• Motorway vignette and road tolls for business trips
• Spare key, roof box, tow bar for business-used vehicles
• Car washes and interior cleaning, insofar as business-related
• Garage rent or outdoor parking at your business premises

All of these costs count as business expenses you claim on your tax return – always to the extent of your business share. We've put together the complete overview of all deduction options for the self-employed in our guide to tax deductions for the self-employed. If you only look up the car items there, you'll miss the rest of the room for manoeuvre.

Andrea, a photographer from Zurich, learned that the hard way. For three years she didn't claim her garage rent of CHF 1,680 per year, because she thought "the car is mixed-use anyway." With a 70% business share, that would have been around CHF 3,500 in missed deductions over three years – a good CHF 1,200 in taxes she paid too much. Since she records every expense directly in Magic Heidi, that doesn't happen to her anymore.

Insurance and Accidents: Who Pays for What?

Briefly on insurance, because it's often forgotten with company cars – until the first claim. The basic rule in Switzerland: liability insurance covers damage you cause to others with the car – whether on a business or private trip. For comprehensive cover, it's worth checking the policy: some insurers charge a surcharge or won't pay at all if a vehicle clearly insured as private is used predominantly for business. Clarify before signing how your usage profile must be declared.

In an accident with the company car, the claim is settled through the vehicle insurance, just as it would be privately. But the deductible is a business expense if the accident happens on a business trip – for a private accident, it belongs to the private portion. And for the self-employed without employees: the statutory accident insurance (UVG/AHV-adjacent) doesn't cover you as an owner automatically; you arrange that yourself, for example through private accident insurance or loss-of-earnings cover. If you let employees drive the company car, on the other hand, their UVG coverage via Suva is mandatory.

Marco solved it this way for his Transporter: partial comprehensive cover with a CHF 500 deductible, free choice of garage, and the policy explicitly issued for mixed use with an 80% business share. After a parking dent costing CHF 2,300, he deducted the CHF 500 deductible as a business cost – correctly declared, no discussion with the tax office.

Frequently Asked Questions About Company Cars in Switzerland