Limited deductibility based on fuel type and COĀ² rate
Car expenses š mainly include the recurring cost of a lease or depreciation (depending on your choice between buying or leasing) but also all related costs: insurance, road tax, repairs and maintenance, breakdown assistance, tyres, vehicle inspection, fuel, tolls, parking, charging stations, electricity (electric car)ā¦
Car expenses are deductible in a limited way. They range from 0 to 100% depending on the fuel type, the CO2 rate and the order date of the car. They apply equally to the recurring cost and to all the related expenses listed above. Only loan interest in the case of financing is automatically 100% deductible (up to the level of professional use, of course). VAT, on the other hand, is recoverable at between 35% and 50% (depending on professional use ā see details here).
Keep in mind that, in addition to the limited deductibility linked to COĀ² and fuel type, you should not forget:
If you operate through a company: the benefit in kind
If you are self-employed as a natural person: the business use percentage
I am self-employed as a natural person and my vehicle runs on diesel with a COĀ² emission of 134g/km ā what can I deduct? Based on my vehicle's specifications, the deductibility of the car and its related expenses is 53%. However, you also use your car for private purposes. You therefore need to take the business use percentage into account. Let's say it is 75%. If you pay a monthly lease of ā¬500 for your car, the deductibility is calculated as follows: ā¬500 x 53% x 75% = ā¬199.
š” Aim for 100% deductibility by choosing an electric car, a bicycle or public transport šÆ.