1% of the purchase value is taxed, regardless of usage (company car could be used only for private purposes). That way the same cost for the employer leads to a

1% of the purchase value is taxed, regardless of usage (company car could be used only for private purposes). That way the same cost for the employer leads to a bigger car (than if bought with taxed income) for the employee and less money for the government. And a happy car industry, of course, being able to sell bigger cars.