Can I deduct the value-added tax for company vehicles?
August 21, 2023 | 40,00 EUR | answered by Dietrich Hohenadel
Dear tax consultant,
my name is Norbert Ehlert and I run a small craft business. In my business, we use company vehicles to reach our customers and carry out orders. So far, I have not delved into the topic of VAT for these vehicles and I am wondering if I can deduct these costs from my taxes.
Currently, I am paying VAT for the acquisition and maintenance of company vehicles without knowing if I can deduct these costs from my taxes. This is financially burdening my company and I am worried that I might be losing money that I could actually save.
Therefore, my question to you as an expert in value added tax: Can I deduct the VAT for company vehicles? Are there specific requirements that I need to meet for this? What are the possibilities to optimize these costs for tax purposes and to financially relieve my company?
I look forward to your expert advice and thank you in advance for your support.
Sincerely,
Norbert Ehlert
Dear Mr. Ehlert,
Thank you for your question regarding value-added tax for company vehicles. It is understandable that you are considering how to optimize the costs for the acquisition and maintenance of your vehicles for tax purposes, in order to financially relieve your company. I am happy to explain the options available to you in this regard.
In general, you can deduct the value-added tax for company vehicles as input tax. This means that you can deduct the value-added tax you pay for the acquisition, repair, maintenance, and insurance of your company vehicles from the value-added tax you receive from your customers. This reduces your value-added tax liability and saves you financial resources.
In order to deduct the input tax for company vehicles, these vehicles must be used exclusively for business purposes. This means that you must prove that the vehicles are used for at least 90% for business purposes. Private trips or the use of the vehicles for non-business purposes can affect the deductibility of input tax.
To optimize the deduction of input tax for company vehicles, I recommend keeping detailed records of the usage of the vehicles. This includes mileage logs, fuel receipts, insurance documents, and repair invoices. The more precise and detailed your records are, the better you can claim input tax and avoid possible inquiries from the tax office.
Furthermore, there are other ways to optimize the costs for company vehicles for tax purposes. These include, for example, using electric or hybrid vehicles, which generally have more favorable tax regulations, or the possibility of margin taxation for used vehicles.
I hope this information is helpful to you and I am available for any further questions.
Sincerely,
Dietrich Hohenadel
