A company car, often called a service car, is a vehicle that provided by the employer and which may only be used in the service. It cannot be used for private purposes, except to a very limited extent. This is an important difference from a company car, and places specific requirements on how the car is managed, documented and monitored.

What is a company car according to the Swedish Tax Agency?

According to the Swedish Tax Agency, it is no taxable benefit about the car:

Only used in the service, and
Not used for private travel, except in exceptional cases (maximum 10 occasions and maximum 100 miles/year)

If these limits are exceeded, the car is considered to have been used privately and a car benefit arises which is taxable.

Typical uses of company/service cars:

Craftsmen, installers, technicians, field salesmen
Vehicles with fixed equipment or tools
Cars parked at the workplace or locked up in the evening

How is it checked that the car is not used privately?

The Swedish Tax Agency assumes that the employer has control over the use of the car. It is therefore important to be able to prove that the car is not used for private purposes.

It is done in practice by:

Driving log - showing that all journeys are official journeys
Company's internal rules and procedures - e.g. leaving the car at the workplace at the end of the working day
Equipment in the car - permanently fitted interior or logo showing that the car is not intended for private use

When will there be a car benefit after all?

If an employee uses the car for private use (e.g. picking up children, weekend trips or travelling home with it without specific reasons), it counts as car benefit - even if it is only temporary. In this case, the benefit value must be calculated and taxed according to the Swedish Tax Agency's tables.

Important: Also short-term private derogations counts as private use.

What does the Swedish Tax Agency say about driving records for company cars?

In order to prove that the company car is not used privately, the Tax Agency recommends that a driving records are kept continuously. It should include:

Dates of each journey
Start and end address
Purpose of the trip
Meter reading at start and end
Clear separation between business and possibly private driving

Without a driving licence, the risk of the car being considered a car benefit with full taxation.

Benefits of digital logbook for company car/service vehicle

For companies using vehicles for business purposes, a digital driving log a simple solution that fulfils the requirements of the Swedish Tax Agency - and simplifies everyday life.

8 key benefits:

Automatic registration of all journeys with GPS or vehicle sensors.
Clear documentation showing that the car is only used for business purposes.
Preventing private driving - the system can be linked to user authorisation and provide notifications.
Possibility to create reports for audit or internal control purposes.
Safely stored data in the cloud, up to 7 years under the Accounting Act.
Reduces administrative burden - no manual record keeping required.
Gives the employer control and transparency of the vehicle fleet.
Protecting against erroneous tax claims during an audit.

Executive summary

A company car used only for business purposes shall not lead to car benefit - but it requires clear documentation. A digital logbook provides companies and drivers with a secure and efficient tool to meet the requirements of the Swedish Tax Agency, while minimising administration.

Want to protect your business from tax penalties and uncertainty?
Use a digital journey log solution and document every journey correctly - easily, automatically and audit-proof.