All About VAT Reclaim for Corporate Cars

For companies using operational leasing, one of the most significant financial advantages, in addition to many others, is the possibility of reclaiming VAT. While the administrative process may seem complicated at first glance, it is actually very simple, allowing you to find the solution that best suits your needs. Let’s dive into the details!

Share this

What Does the VAT Act Say?

Under current regulations, companies can reclaim VAT proportional to the business use of corporate cars obtained through operational leasing. Whether you keep detailed mileage logs or opt for a simpler flat-rate solution to avoid this administrative task is entirely up to you.

The decision between the two methods typically depends on how much the car is used for business purposes. If business use significantly exceeds 50%, it is worth undertaking the administration of mileage logs, as the flat rate only allows a maximum of 50% of the monthly VAT to be reclaimed.

It is essential to note that commuting is not considered business use. Therefore, distinguishing between cars used primarily for business operations and those provided as employee benefits can be important.

When is it Worth Choosing the 50% Flat Rate?

According to tax authorities, there is no need to prove the proportion of use for business purposes. This means that even with minimal business use, you can reclaim 50% of the VAT on the monthly fee. All that is required is a supporting document, such as a corporate car policy, to demonstrate some business use. If you or your employees primarily use company cars for commuting, attending meetings, or visiting pickup locations, the 50% flat-rate VAT deduction may be the most advantageous choice. This also eliminates the additional administrative burden of maintaining detailed mileage logs.

When is it Worth Maintaining Mileage Logs?

If company cars are used exclusively for business purposes—such as delivery vehicles, service vehicles, sales cars, or pool cars—and business use significantly exceeds 50%, keeping mileage logs is worthwhile. In this case, you may reclaim more, even up to 100% of the VAT. However, in such cases, the accuracy of the mileage logs is strictly monitored, so it is advisable to use pre-agreed, detailed accounting methods or GPS-based tracking systems to avoid potential issues. While this method requires more effort, it can result in a significant amount of money annually on the monthly fees for each car.

What Should I Choose if I Have Multiple Corporate Cars with Different Usage Patterns?

The regulations allow for differentiation in VAT deductions for mixed fleets, meaning you can apply different methods to each vehicle. For instance, you may opt for the flat-rate VAT deduction for some cars while maintaining mileage logs for others.

To determine VAT deductions on a per-vehicle basis, it is crucial to ensure that the monthly fees are itemized by license plate number on the contract or invoice. Ayvens provides the necessary support to facilitate this.

Published at January 1, 1

January 1, 1

All About VAT Reclaim for Corporate Cars

When is it Worth Choosing the 50% Flat Rate?

When is it Worth Maintaining Mileage Logs?

Related articles