Many companies, especially those that use a fleet of cars, are asking themselves whether they can deduct VAT on fuel. Can your company take advantage of this possibility? What conditions must you meet? Answering these questions will not only help you better manage your costs, but also ensure that your company is operating in compliance with current regulations. In this article we will discuss who can deduct VAT on fuel and what conditions must be met.
Who can take advantage of the VAT deduction on fuel?
VAT deduction on fuel is not available to everyone. The general rule is that it can be used by VAT taxpayers who use fuel for business activities. However, there are certain stipulations and conditions that must be met.
Entrepreneurs who are VAT payers
To be able to deduct VAT on fuel, you must be an active VAT taxpayer. This means that you are self-employed, registered for VAT and regularly submit VAT returns. VAT-exempt taxpayers cannot deduct VAT on fuel.
Use of fuel for business activities
Fuel must be used exclusively for business purposes. VAT cannot be deducted on fuel used for private purposes. For cars used for both business and private purposes, the VAT deduction on fuel may be proportional to the degree of business use of the vehicle.
VAT deduction for fuel – necessary conditions
However, it is not enough to be a VAT payer and use fuel for business activities. There are additional conditions that must be met to qualify for the VAT deduction on fuel:
- Keeping mile age records – one of the key requirements is to keep mileage records. These records must be kept in an accurate and compliant manner to document the use of the vehicle for company purposes. The records should include information such as the date the vehicle was used, the purpose for which the vehicle was used, the number of miles driven and the name of the driver.
- Have the right documents – in order to be able to deduct VAT on fuel, you must have the right documents to prove the purchase of fuel. These are mainly VAT invoices, which must be issued to your company. The invoice should contain all the necessary information, such as the date of purchase, the quantity and price of fuel, and the VAT rate.
- Use of specific vehicles – the right to deduct VAT on fuel varies depending on the type of vehicle. For passenger cars, VAT deduction is limited. According to current regulations, it is possible to deduct 50% of VAT on fuel for passenger cars used for both business and private purposes. VAT on fuel can be fully deducted only for trucks and passenger cars used exclusively for business purposes.
Virtual office as support for VAT deduction on fuel
Using a virtual office service can help with record keeping, collecting invoices and filing VAT returns. A virtual office offers a professional correspondence service, making it much easier to manage records and improve efficiency in business. Regular monitoring of changes in regulations and meticulous record-keeping are the basics that will ensure correctness and efficiency in deducting VAT on fuel.