VAT and company vehicles – a basic overview
The question of VAT and company vehicles matters to businesses above all when recovering tax on the purchase of a car, on fuel and on running costs. The extent to which VAT can be recovered often depends on how the vehicle is used. We have prepared a basic, general overview to help you get your bearings before consulting your accountant. The framing follows Slovak practice; check the rules in your own country.
When the right to recover VAT arises
The topic of VAT and company vehicles revolves around whether and to what extent a VAT-registered business can recover the tax on the purchase of a vehicle and related costs. In general the right is linked to the vehicle's use for economic activity.
The exact conditions, the scope of recovery and the exceptions are governed by VAT law. As this is a complex area, always verify your specific entitlement with an accountant or tax adviser.
The effect of private use on recovery
If the vehicle is also used privately, that can affect the extent to which the business recovers VAT. The part relating to private use generally does not fall within full recovery.
That is precisely why it is important to be able to prove the ratio of business to private use. Without records this ratio is hard to establish, and during an inspection that can be a problem.
The role of the mileage log in VAT
A mileage log is important documentation for VAT too – it evidences which journeys related to economic activity and which were private. That helps support the recovery claimed.
Credible records kept continuously reduce the risk of disputes with the tax administrator. Reconstructing journeys after the fact is error-prone, so it pays to automate the records.
How SaveTrack supports correct records
SaveTrack creates an automatic mileage log from a Teltonika GPS device and lets you distinguish business from private use on each journey. The business thus has documentation with which to evidence the extent of the vehicle's use.
An export for your accountant is ready quickly and with no manual re-typing. Thanks to continuous record-keeping the data is to hand whenever your accountant needs it for a VAT return.
Recommendation
VAT on vehicles is among the more complex areas and applying it correctly depends on many factors. This overview is therefore informative in nature and contains no specific rates or amounts.
Always deal with your specific right to recover and its extent with an accountant or tax adviser. SaveTrack will provide reliable documentation on how the vehicles are used.
FAQ
Can I recover VAT on the purchase of a company car?
The right to recover is linked to the vehicle's use for economic activity and is governed by VAT law. Verify the specific scope and conditions with your accountant.
How does private use affect VAT recovery?
The private portion of use generally does not fall within full recovery. It is therefore important to be able to prove the ratio of business to private journeys.
Does a mileage log help with VAT?
Yes, a mileage log evidences which journeys related to economic activity. It is important documentation for the recovery claimed and in any inspection.
How does SaveTrack support record-keeping for VAT?
SaveTrack creates an automatic mileage log and lets you distinguish business from private journeys. An export for your accountant is available quickly and with no manual completion.
Want order in your vehicle records for VAT? SaveTrack supplies the documentation automatically. Call +421 908 918 880 or write to info@savetrack.sk.
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