Limited deductibility based on fuel type and CO² rate
Car expenses 🚗 mainly include the recurring cost of a lease or depreciation (depending on your choice between purchasing or renting) but also all related expenses: insurance, road tax, repairs and maintenance, breakdown assistance, tyres, technical inspection, fuel, tolls, parking, charging stations, electricity (electric car)…
Car expenses are deductible on a limited basis. The rate varies from 0% (for combustion engine cars purchased after 31/12/2025) to 100% for electric vehicles, and applies uniformly to the recurring cost and all 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 is recoverable at between 35% and 50% (depending on professional use, see details here).
Please note that, in addition to the limited deductibility linked to CO² emissions and fuel type, you should not forget:
If you operate through a company: the benefit in kind
If you are a sole proprietor: the business use percentage
I am self-employed as a sole proprietor and my vehicle is a diesel with CO² emissions of 134g/km — what can I deduct? Based on my vehicle's characteristics, the deductibility of the car and related expenses is set at 53%. However, you also use your car for private purposes. The business use percentage must therefore be taken into account. Let's say it is 75%. If you pay a monthly lease of €500 for your car, the deductibility is calculated as follows: €500 x 53% x 75% = €199.
💡 Aim for 100% deductibility by choosing an electric car, bicycle, or public transport 💯.