📍 Car

VAT recovery on car expenses 🚗 depends on the professional use of the vehicle (from 35% up to a maximum of 50%). Without any justification, the tax authorities will apply a 35% recovery rate. If you justify your choice, that percentage could rise to 50%. As a reminder, car insurance does not include VAT, so there is nothing to recover on that item.

How is professional use calculated from a VAT perspective? The VAT administration has set certain assumptions to estimate your private kilometres: 200 days for your home-to-work commutes (considered private) + 6,000 private kilometres per year.

For example, you drive 25,000 km/year, and the distance between your home and your place of work is 20 km. You cover 8,000 km for home-to-work commuting per year (200 days x 20 km x 2 for the round trip) + 6,000 km = 14,000 private km. This represents 56% of your total kilometres, meaning a professional use of 44% (100% - 56%).

💡 The calculation method for the VAT recovery percentage is different from the calculation for the deductibility percentage. Keep in mind that VAT recovery ranges from 35% to 50%, and BILLY will help you with the calculation.