For many freelancers, staying mobile is essential to getting work done. Whether it's commuting to your workspace, meeting clients in different locations, or traveling to important events and seminars — getting around is often just part of the job.
But how does it actually work when it comes to deducting car expenses from your taxes? Does it make sense to get a company car (Geschäftswagen)? And how do you figure out the so-called Kilometerpauschale — the standard mileage allowance?
We’ll walk you through all of that here, along with everything else you need to know about using a car or public transportation (öffentliche Verkehrsmittel) in your freelance business.
If you drive a lot for your freelance work, the good news is: Many of those costs are tax-deductible. That applies not just to longer business trips, but also to shorter drives within your hometown. These expenses fall under travel and transportation costs, and you can claim them on your taxes.
In general, here are the kinds of expenses you can deduct:
Of course, the key requirement is that these costs must be directly related to your self-employed work. So, unfortunately, that weekend getaway or a visit to friends in another city doesn’t count.
If you’re using your own car for work, it makes a difference whether it’s a personal vehicle or a company car (Firmenwagen) — and how much of the car’s overall use is actually for business.
Here’s how it works:
💡The easiest way to handle this? Use a tax tool like Accountable. It walks you through how to enter your car details and automatically applies the right deductions.
There are a few ways to deduct travel expenses from your taxes — and it mainly depends on whether your car is considered a company car or a personal vehicle.
This overview will help you figure out what applies in your case:
| How much do you use the car for business (as a % of total use) | Your car is considered | What you can deduct |
|---|---|---|
| Less than 10% | Personal vehicle | Standard commuter allowance (Pendlerpauschale) + additional business-related travel costs |
| 10% – 50% | You decide | Depends on whether you classify the car as part of your business or private assets |
| More than 50% | Business asset (Betriebsvermögen) | Either actual costs (via the 1% rule) or proportional costs (using a logbook / Fahrtenbuch) |
Not sure what the 1% rule or logbook method means? Don’t worry — we’ll explain that next.
If you only use your personal car for short work-related trips but still want to save on taxes, the commuter allowance — known in German as the Pendlerpauschale (also called Entfernungspauschale) — is your go-to option when filing your tax return. And here’s the good news: you don’t have to drive to claim it.
Even if you prefer to walk, bike, or take public transport for those short distances, you can still use the commuter allowance. What matters is the distance — the number of kilometers between your home and your regular place of work (whether that’s an office, a client’s location, or a co-working space).
Here’s how the allowance works:
If you take public transportation, there’s a general maximum deduction limit of €4,500 via the commuter allowance. However, if your actual commuting costs (e.g., train or bus passes) are higher than that, you can still claim them — you’ll just need to provide receipts as proof. So be sure to hang on to your tickets or monthly passes!
Important: That €4,500 limit does not apply if you drive your own car or use a company car (Dienstwagen). In those cases, the full mileage allowance can be claimed, no cap.
Keep in mind:
The calculation is based on your actual workdays in the calendar year, and you can only claim the one-way distance — meaning just the trip from home to work. The return trip doesn't count toward the deduction.
💡Tip from Accountable: The tax office usually assumes you take the shortest route by distance. But there’s an exception: if you regularly take a longer but faster route — for example, using a bypass to avoid city center traffic — you can claim that distance instead. Just be ready to explain why it’s the more reasonable option.
You can also claim your private car as a business expense. That means you're allowed to deduct not only fuel costs, but also car tax (Kfz-Steuer), insurance, maintenance, and even depreciation.
Here’s how it works:
You calculate the total annual costs for the car and divide that by the number of kilometers driven in total. This gives you a personal cost-per-kilometer rate.
You can then deduct that rate — but only for the business portion of your driving. Personal trips are not tax-deductible.
How do you track the difference between personal and business use? That’s exactly what we’ll cover in the next section.
➡️ Want to see how to claim your travel costs step-by-step in your income tax return? We explain it all right here.
If your car qualifies as a company car (Firmenwagen) — meaning more than 10% of your total mileage is for business purposes — you can deduct the vehicle expenses from your taxes as a self-employed person. These costs count as business expenses, or Betriebsausgaben.
That includes:
But here’s the catch: if you also use the car privately, you’ll need to clearly separate private and business use. Why? Because using a company car for personal reasons counts as a taxable non-cash benefit (geldwerter Vorteil), and that part must be taxed.
As a freelancer, you have two options to track the split between personal and professional use:
We’ll walk you through both methods in the next section so you can choose what works best for you.
If you choose to use the 1% rule (1%-Regelung), you’ll be taxed each month on 1% of your car’s official list price (Bruttolistenpreis) as a non-cash benefit (geldwerter Vorteil) for private use.
For example:
If your car’s list price (including any accessories) was €40,000, 1% of that is €400. This amount is added to your taxable income each month, increasing the overall income you pay tax on.
The upside?
This rule covers all private use of the car — including holiday trips or weekend outings — and you don’t need to track individual private journeys. However, you can only use the 1% rule if more than 50% of your car’s use is for business purposes.
Alternatively, you can keep a logbook (Fahrtenbuch) to track every single trip and distinguish clearly between personal and professional use.
At the end of the year, only the actual private use of the car is taxed as a non-cash benefit — based on your precise records.
To use this method, each trip must be documented in detail with the following:
Yes, it’s more work — but it can pay off if your private use is low and the car’s value is high.
That depends on your situation.
As a self-employed person, when you make a purchase that costs more than €1,000, you can’t deduct the full amount in a single year. Instead, you’ll need to spread the cost over a specific period — this is called depreciation, or Abschreibung.
The length of this period, known as the useful life (Nutzungsdauer), is set by the German Ministry of Finance — and for cars, it’s fixed at six years.
Example: How Depreciation Works
Let’s say you buy a car for €60,000 (net).
You’ll need to write off the purchase over six years. That means:
So instead of a one-time deduction, the cost of the car gradually lowers your tax bill over time.
To encourage the switch to electric vehicles, Germany offers several tax advantages when you buy a battery-powered company car or a plug-in hybrid for business use.
One major benefit:
For fully electric cars, the taxable non-cash benefit (geldwerter Vorteil) is reduced — instead of the usual 1% of the car’s list price (Bruttolistenpreis), only 0.5% is applied. That means a lower amount is added to your taxable income compared to using a traditional gas or diesel company car.
And it gets even better:
Since 2020, if your fully electric company car has a list price of no more than €60,000, only 0.25% of the list price is taxed as a benefit.
Thanks to the Growth Opportunities Act (Wachstumschancengesetz) passed in spring 2024, the threshold was increased. Now, retroactive to January 1, 2024, electric company cars with a list price of up to €70,000 still qualify for the 0.25% rule.
If your electric car costs more than €70,000 — or you drive a plug-in hybrid — the 0.5% rule applies.
👉 Important: Plug-in hybrids only qualify if they have a fully electric range of at least 60 km or CO₂ emissions of no more than 50g per km, based on the WLTP standard.
These rules are expected to stay in effect until the end of 2030.
Tax breaks also apply to charging your EV:
If there’s a charging option at your workplace or a charging card provided, you can deduct:
There’s no longer a government rebate for buying electric vehicles (as of late 2023), but the car tax exemption (Kfz-Steuerbefreiung) still applies.
You can benefit from up to 10 years of exemption from vehicle tax — but keep in mind:
This benefit also ends on December 31, 2030, so if you buy an EV now, you won’t get the full 10 years.
If you're self-employed, you’re not limited to just writing off car expenses – you can also deduct costs for other types of transportation.
If you don’t own a car or mostly get around by bike, you can not only claim work-related trips using the Kilometerpauschale (flat rate per kilometer), but even deduct the purchase price of the bike – as long as you use it for business at least 10% of the time.
This applies not only to regular bicycles but also to pedelecs, e-bikes, (e-)mountain bikes, and racing bikes. In general, it covers all bikes that don’t require a vehicle registration or license plate.
To prove business use, the same rules apply as with a company car: you can either keep a detailed logbook (Fahrtenbuch) or use the 1% rule. With bikes, however, the 1% rule only applies to one quarter of the purchase price – not the full amount.
If your business use falls between 10–50%, you can choose whether the bike is considered part of your business assets. If it's more than 50%, it automatically counts as a business asset. In that case, you can deduct the cost from your taxes. If the bike costs less than €1,000, you can write off the entire amount right away. For more expensive bikes, you’ll need to depreciate it over its official useful life.
If you use public transportation for business purposes, you can choose between applying the Kilometerpauschale (flat rate per kilometer) or deducting the actual costs of your tickets.
It’s worth doing a quick calculation to see which option gives you the better tax advantage.
Important: Be sure to keep all your receipts – they serve as proof that the trips were business-related. With Accountable’s receipt scanner, for example, you can easily save your tickets digitally.
Sometimes, your freelance work may require longer business trips by train or even plane.
While air travel isn’t covered by the Kilometerpauschale (mileage allowance), you can still deduct it—provided the trip had a clear business purpose, like a client meeting, a professional seminar, or a job-related training session.
A vehicle is classified as a commercial vehicle (Nutzfahrzeug) if it’s marked with an “N” or “M” in field J of its registration certificate. This includes vans, pick-ups, and transporters. If your vehicle doesn’t have this classification, it won’t be considered a commercial vehicle for tax purposes.
If you use a commercial vehicle strictly for business, you can deduct 100% of its related expenses:
Just make sure to keep receipts or invoices for each expense—you’ll need them when filing your taxes.
💡 Accountable tip: You don’t need a car to deduct travel costs as a freelancer. Whether it’s a bike, a train ride, or a commercial van—Accountable lets you log all these expenses easily and helps you save on taxes.
Can I deduct my car as a freelancer?
Yes, it's possible – as long as the car is used (at least partially) for business purposes. It's important to be able to prove the business usage share – for example, through a logbook. Ongoing costs such as fuel, repairs, insurance, and maintenance can also be deducted proportionally.
Can I deduct a car as a small business owner (Kleinunternehmer)?
Yes, the same tax rules apply to small business owners as to other freelancers. The key factor is the business use and its documentation.
Is a company car worth it for freelancers?
If you're frequently on the road for work, a company car can be worthwhile – not only financially but also organizationally. You can deduct the purchase, operating, and maintenance costs. If you also use the car privately, you must tax the private portion – via the 1% rule or a logbook. Which method is more beneficial depends on the vehicle's value and your usage pattern.
💡 Tip from Accountable: With the app, you can easily manage your travel expenses, receipts, and tax obligations – all digitally. Tax coaches are available to assist you personally via chat.
20 Kapitel knallhart recherchiert und vom Steuerprofi geprüft
Kostenlos herunterladen
Author - Sophia Merzbach
Sophia has been a key member of the Accountable team for many years, bringing a unique blend of journalistic precision and in-depth tax expertise to her work.
Who is Sophia ?Thank you for your feedback!
Useful
How much income tax is deducted from your income is largely determined by your tax class. There are ...
Read moreWorking as a self-employed professional has many advantages: You are your own boss and you can choos...
Read moreWorking with international clients can be tricky, depending on where exactly they’re located, whet...
Read more
