Many businesses provide cars and fuel for their employees use. Sometimes the car may be required for business journeys by the employee. In some cases, the car is provided as part of the employee’s salary package. In most cases even where an employee needs the car to perform his work the employee will also be entitled to make use of the car for private purposes. Since many business cars are not solely used for business, VAT recovery of the purchase and leasing of cars is restricted under the VAT rules.
Source Way2VAT
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