--- title: Tax authorities investigate car users date: 2012-12-04T07:38:12Z modified: 2012-12-04T07:38:12Z permalink: "https://grow.ee/auto-kasutaja-erisoodustus/" type: post status: publish excerpt: "" wpid: 1653 timestamp: 2012-12-04T07:38:12Z tags: - Accounting --- The tax authorities have recently investigated the connection of the people indicated as users on the company's car registration certificate to the company from several entrepreneurs. The question sounds more pointed if the user is, for example, a family member of a board member and the company has not declared the use of the car for purposes unrelated to business. The tax authorities are probably trying to get an answer with this question that confirms the use of the car for purposes unrelated to business. This includes, among other things, driving from home to work and back. When such a car is used, it is generally considered a fringe benefit, which should have been declared by the 10th of the month following its occurrence and the corresponding fringe benefit expense should be reflected in the accounting. When a fringe benefit is declared retrospectively, the late payment interest calculated on the later payment of taxes and the income tax calculated on it are usually also added as an expense. Leaving aside the discussion on the possible occurrence or non-occurrence of a fringe benefit, I would like to draw attention to the tax authority's question regarding the users of the car. Namely, the fact that the user is mentioned in the car registration certificate is not in itself a fact proving the occurrence of a fringe benefit. Under certain conditions, even if a member of the company's management board parks in the parking lot of a shopping center to make personal purchases there that are in no way related to the business, it cannot be considered a fringe benefit. Namely, the Supreme Court has taken the position that if an employee uses the employer's vehicle for activities unrelated to the business in a way that is not a financially assessable benefit and if this use does not result in expenses for the employer, then it is not a fringe benefit within the meaning of Section 48 of the Tax Code. For example, an employee may stop the car without extending their journey in order to combine personal activities with business travel. In conclusion, the response to the tax authorities can explain the users' non-connection with the company or business without fear of the automatic fringe benefit tax. However, it should be borne in mind that the actual occurrence of the fringe benefit is an event that gives rise to a tax liability. Failure to declare it will entail corresponding costs. **[Order accounting services from us and we will help you mitigate tax risks!](https://grow.ee/wp-content/uploads/wp-mfa-exports/page/kontakt.md)**