As of 23 September 2026, the Tax Agency has confirmed its administrative practice of allowing self-employed individuals to deduct 50% of the VAT paid on the purchase of a vehicle (presumed 50% business use) while simultaneously denying the deduction for fuel, repairs, tolls, and parking unless the taxpayer provides specific evidence of professional use for each expense. This position, based on long-standing DGT consultations, creates a paradox where the vehicle acquisition qualifies for the presumptive deduction, but operating costs require strict individualized justification.
Key Takeaways
- Split Treatment: Vehicle purchase VAT qualifies for the 50% presumptive deduction; operating expenses (fuel, maintenance) do not.
- Evidence Burden: Taxpayers must maintain detailed logs (mileage, purpose, client visits) for each fuel purchase and repair to support deduction claims.
- Planning Opportunity: Consider alternative vehicle ownership structures (leasing, company ownership) to align deduction treatment across acquisition and operating costs.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement