VAT deductibility of car expenses when the car is registered to bookkeeping
You can deduct the VAT of car purchase and operating costs only if the registered car is 100 % in business use. Even minor private use of a car registered as a business asset cancels the right to deduction completely.
- If you have registered a car as part of your bookkeeping and the 100% use does not take place, you cannot deduct the VAT of the costs.
- If your car is only in business use, please contact our customer service.
An example. You have bought gas and the receipt has a VAT rate of 24 %. When you add the receipt to our service as an expense, you need to check the whole paid amount as an expense and select the 0 % VAT rate.
Cars that have been acquired for driving lessons, taxi driving or as rentals are the exception and are eligible for VAT deduction according to the business use.
VAT deductibility of purchase and operating costs of the van
You can deduct the part of the VAT on the purchase costs of a van that comes to business use that goes to business trips. The same rule is also used for VAT deducted from operating expenses. You can therefore also drive private trips with a van, and still not lose the full VAT deduction right.
Private- and business trips must be itemized in the logbook, which shows VAT-deductible drives related to the business operations, as well as private drives not related to the business operations or other drives that are not VAT-deductible.
The VAT correction for the purchase and operating costs of the van is made on the last VAT return of the year when the correlation between business and private driving is clear.
VAT payable on the sale of the vehicle
Please note that the intended use of the vehicle determines whether VAT must be paid on the sale of the vehicle. VAT must be paid on the sale, if the vehicle has been used by the business authorizing to VAT reduction. VAT must be paid, even if the purchase price did not include deductible VAT.