Rules for a Driver’s Log Book

The Bundesfinanzhof has set rules for an orderly driver’s log book. Such log book will only be accepted if it was kept up-to-date and the entries cannot be altered easily.

There are two main situations when a log book is required or can be used:

  1. Employees having received a company car from their employer that they can also use for private purposes.
  2. Business persons to determine the private usage of their car with a logbook.

The logbook is the alternative method of calculating the private usage of the car. Only with this method you can really show that you have less private usage than the legal method shows. The legal method calculates the advantage with 1% of car’s gross list price.

As orderly as Germans typically are so is the logbook to be: “orderly”! Now what does orderly mean? With its judgment of November 9, 2005 (re VI R 27/05) the Federal Fiscal Court judged that your recordings have to complete, continuous, up-to-date, and that it can only be altered with great efforts afterwards.

This court therefore considered that writing a logbook from loose sheets later on does not qualify. In another judgment on November 16, 2005 (re VI R 64/04) is was determined that writing a logbook using a calculation program also does not qualify because due to the nature of the program you cannot document if and which changes have been made – disregarding the fact that you can easily change the data.

So how do you keep a logbook if you do not want to pay for expensive installations? Use a checkered notebook available at every stationary shop, make columns for date, mileage begin (of travel), mileage end (of travel), km (driven), and purpose. You can also use forms available at any stationary shop. The purpose must contain the customer’s name you visited and general location (e.g. Berlin or Munich). Make sure that this customer can be found in your bookkeeping... Private travels are marked with “private”. It is none of Finanzamt’s business what you do privately. What happens when your log book is not as "orderly" as required, deduction of these costs will be refused in total – for income tax and VAT.