Reclaiming VAT on a Company Car

In general no VAT can be reclaimed on the purchase of a car for personal use. However all VAT can be claimed on the purchase of commercial vehicles such as vans and trucks.

In your particular case a new provision that was introduced in 2008 may be of benefit. This new rule allows for a 20% VAT deduction for VAT incurred on 'qualifying' cars. You can qualify for this deduction if you use your car at least 60% of the time for business purposes and provided the car is first registered after 01 January 2009. A qualifying car is specifically defined on the Revenue commissioners website but it is essentially any motor vehicle with a level of CO2 emissions of less than 156g/km. As such, it is important to check when buying a new car that it will qualify.

A claw-back of the VAT reclaimed would arise if you sell your car within two years of acquisition.

It should also be noted that no VAT can be reclaimed on petrol but VAT can be reclaimed on diesel.

If you would like to find out more about VAT returns please click here.

 

Date published 9 Jul 2013 | Last updated 17 Feb 2022

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.