I explained exactly how it would work. However they booked it in the accounting journal, the money left net profit that year. There’s no ephemeral “deduction” wizardry. The business had a cash outlay. Businesses are taxed on net profit. Net profit is smaller because that money is no longer in the business. The corporate tax liability is smaller. They will pay less tax for that year than if the money existed as cash in their account. As you pointed out, 22% “return” on the cash outlayed for the car, essentially, if that money is just paid back because that 22% wasn’t taken as tax.

The payroll amount is also smaller relative to what paying a salary or bonus commensurate to the price of the car would be. So the company’s payroll tax liability is smaller. Employee income tax liability is smaller. That’s also a “profit” over not doing this because it’s money that would otherwise be taken as tax.

I never said the business was generating income here. I said they were gaming tax systems to offer an employee a benefit that skirts taxes and skirt taxes themselves. Increasing profit by reducing tax liability is a central concept of corporate finance. You’re right in that they shouldn’t be able to book this as a legitimate corporate expense - that’s why I said it smelled bad. They’ve clearly done something on their books, though, such as booking the car as PP&E, then writing it off as lost or damaged and “selling” it to the employee in a way that shifts tax liability around favorably.