The Federal Fiscal Court ruled in its decision of August 20, 1997 (Federal Tax Gazette II, p. 667) that the conversion of cash wages into benefits in kind, such as the provision of a company car, is permissible for tax purposes and can be valued using the 1% method. The focus here is not on the receipt of the wages, but rather on the tax treatment of the benefit in kind.
The specific implementation is found in Section 8, Paragraph 2, Sentences 2 and 3, in conjunction with Section 6, Paragraph 1, No. 4, Sentence 2 of the Income Tax Act.