How to deduct your car, bike & travel costs in Germany: 2025 guide
Diana
Updated on:
Jun 13, 2025
TL;DR:
You can deduct commuting, business trip, e-car, and bike costs if you use the right methods. This guide explains how to lower your income tax and VAT by applying the latest commuter allowance, mileage rules, and EV incentives.
What’s new for 2025?
Commuter allowance jumps to €0.38/km from the 21st kilometre and will remain until at least 31 December 2026.
Mileage allowance stays at €0.30/km for cars and €0.20/km for motorbikes on business trips.
0.25 % rule now covers electric cars up to €70 000 list price thanks to the 2024 Wachstumschancengesetz.
Upgraded tax-free charging flat rates: €30/€15 with a workplace charger or €70/€35 without (EV/HYB).
E-vehicles first registered by 31 Dec 2030 enjoy up to ten years of zero Kfz-tax.
Three cost buckets you can deduct
Commuting to your first workplace (Pendlerpauschale)
Distance | Rate per km | Cap? |
|---|---|---|
First 20 km | €0.30 | Yes – part of €4 500 public-transport cap |
From 21 km | €0.38 | Same cap applies |
The €4 500 cap does not apply when you drive your own or a company car. If actual public-transport costs exceed €4 500 you may claim the higher real amount with receipts.
Business trips away from home
Claim Kilometerpauschale: €0.30/km for cars, €0.20/km for bikes or motorbikes. Include parking, tolls and overnight stays separately with receipts.
Vehicle running costs
If your car is part of business assets you may deduct fuel, insurance, repairs and depreciation over six years according to the official AfA table.
Private car or company car?
Business share | Status (German term) | Deduction method |
|---|---|---|
0-9 % | Private | Pendler- & Kilometer-pauschale only |
10-50 % | Choice | Pick full cost or mileage |
>50 % | Company car (Firmenwagen) | 1 % rule or logbook (Fahrtenbuch) |
1 % rule: add 1 % of list price to taxable income monthly.
Logbook: tax only private share, but records must be continuous, prompt and tamper-proof.
How to calculate – two examples
Example A: Short commute by car
18 km one-way, 200 workdays:
Example B: 35 km commute by train
35 km, 210 days:
Real annual ticket: €3 200 → claim €3 200 with receipts even though > 4 500 cap.
Deep dive: Electric vehicles in 2025
Rule | Up to €70 000 list | Above €70 000 list |
|---|---|---|
Private-use add-back | 0.25 %/month | 0.5 %/month |
Plug-in hybrid (≥ 80 km electric or ≤ 50 g CO₂) | – | 0.5 % |
Charging flat (work charger) | €30 (EV) / €15 (PHEV) | same |
Charging flat (no work charger) | €70 (EV) / €35 (PHEV) | same |
All percentages apply only if > 50 % business use is proven. Keep the BMF charging-flat letter in your files. E-cars first registered by 31 Dec 2030 remain Kfz-tax-free for up to ten years.
Bikes, e-bikes and scooters
Use the bike ≥ 10 % for business → purchase price fully deductible up to €1 000; above that, depreciate.
Leased company bikes often use the 0.25 % rule on the quarter purchase price.
Commuter allowance (€0.30/km) also applies to bicycle trips.
Public transport, flights & commercial vans
Public transport: choose between commuter allowance or real ticket costs.
Flights & long-distance trains: deduct actual fare with digital PDFs – Norman’s scanner tags them.
N-type vans: 100 % of costs are deductible when used purely for business – keep registration certificate marked “N”.
Compliance checklist
Logbook entries within 7 days of each trip.
Keep fuel or charging receipts 10 years.
Retain BMF charging-flat confirmation letters.
Re-check Pendlerpauschale after 2026 if politics shift again.
Key takeaways
German freelancers in Germany can cut their 2025 tax bill by using the commuter allowance (€0.30/km for the first 20 km and €0.38/km after that) for daily travel, claiming €0.30/km for any other business trips, and—if they use a vehicle more than 50 % for work—treat it as a company car so all running costs are deductible while private use is taxed via the simple 1 % rule or a logbook . Choosing an electric car adds extra savings—only 0.25 % of its list price (up to €70 000) is taxable, workplace charging is tax-free, and EVs registered before 2030 get up to ten years of Kfz‑tax exemption
✅ Find more deductibles you can apply here
FAQ
Can I deduct my personal car if I only drive to a client twice a month?
Yes. Use €0.30/km Kilometerpauschale.
Is a logbook worth the effort?
Often yes if private share is low or car value is high; otherwise 1 % rule is simpler.
Does the €4 500 cap apply when I drive my own car?
No, the cap only limits commuters who use public transport, bikes or walk.
Are charging flats really tax-free?
Yes, €30/€15 with a work charger or €70/€35 without until 2030.
What proof is needed for bike deductions?
At least 10 % business use plus purchase invoice; keep a mini logbook or route list.
How long do I depreciate a car?
Six years according to the AfA table unless industry tables shorten it.
Are foreign tolls with 0 % VAT?
Yes, but they remain deductible travel costs;