- New tax rules limit car depreciation from 2025.
- The rules focus on practical calculations and VAT impact.
- Article 24(2) of the VAT Act states that only deductible VAT can be deducted from income.
- Non-deductible VAT is not deducted from income.
- Example: A company buys a car for EUR 108 900, excluding VAT, EUR 90 000, and VAT, EUR 18 900.
- The car’s CO2 emissions limit the deductible purchase cost to EUR 50 000.
- The EUR 50 000 is attributed to limited deductions over the depreciation period.
- The input VAT on the EUR 50 000, EUR 10 500, is included as a limited allowable deduction.
- The remaining EUR 40 000 of the purchase price is subject to non-deductible VAT, EUR 8 400.
- This non-deductible VAT is declared in Annex S of the annual corporate income tax return form.
- VAT on cars is not deductible under Article 62 of the VAT Law.
- Depreciation costs for passenger cars are limited under Article 30-2(1) of the VAT Law.
- Accountants may wonder when to attribute non-deductible VAT to non-allowable deductions.
- Non-deductible VAT on car purchases can be deducted from income.
Source: vatabout.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
