(2022) How can I deduct the premiums for my car insurance?

Contributions to motor liability insurance can be declared in the tax return; they are deductible as special expenses under pension expenses. However, the portion of the premium relating to comprehensive insurance is not recognised by the tax office.

The reason: Only policies that cover the taxpayer's personal life risks are considered and thus fall under the category of "other pension expenses". Partial or fully comprehensive insurance, on the other hand, is considered property insurance. Therefore, comprehensive cover cannot be deducted by private individuals for tax purposes.

Anyone who wants to declare at least the portion for motor liability insurance in their tax return has two basic options.

Deduct motor insurance premium as special expenses or business expenses

Contributions to motor liability insurance are generally special expenses if they are neither business expenses nor business-related expenses.

If you use the vehicle for journeys between your home and primary workplace and for journeys home as part of maintaining a second household, and you settle these journeys for tax purposes using the travel allowance, the travel allowance also covers the proportional liability insurance premium. However, the tax authorities are generous here: You are allowed to deduct the insurance premium in full as special expenses for simplification purposes (R 10.5 EStR).