{"id":9584,"date":"2026-02-12T10:37:50","date_gmt":"2026-02-12T08:37:50","guid":{"rendered":"https:\/\/www.moore-bdr.sk\/?p=9584"},"modified":"2026-02-12T10:37:50","modified_gmt":"2026-02-12T08:37:50","slug":"new-rules-for-vat-deduction-on-company-car-and-tax-deductibility-from-2026","status":"publish","type":"post","link":"https:\/\/www.moore-bdr.sk\/en\/new-rules-for-vat-deduction-on-company-car-and-tax-deductibility-from-2026\/","title":{"rendered":"New rules for VAT deduction on company car and tax deductibility from 2026"},"content":{"rendered":"

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With the introduction of the new Consolidation Package we informed you here<\/a> recently, new rules will come into force for all businesses regarding the use of company car and the deduction of VAT related to such use. These changes will have a significant impact not only on VAT but also on income tax and the provision of company cars as employee benefits \u2013 below is a comprehensive overview of the new rules applicable from 1 January 2026<\/strong><\/p>\n

The current VAT deduction system for company cars, based on a proportional rate of 80\/20, will be replaced by a new flat-rate deduction. This change aligns Slovak regulations with European legislation.<\/em><\/span><\/p>\n

Comparison of VAT Deduction<\/strong><\/p>\n

Please find below overview of current and new-year rules for company car use:<\/p>\n\n\n\n\n\n\n
Ude of company car<\/strong><\/span><\/td>\nCurrent rule (until December 2025)<\/strong><\/span><\/td>\nNew rule (from January 2026)<\/strong><\/span><\/td>\n<\/tr>\n
Business purposes only<\/strong><\/p>\n

(exclusive business use)<\/td>\n

100%<\/td>\n100% <\/strong><\/p>\n

(if detailed records are kept)<\/td>\n<\/tr>\n

50% <\/strong><\/p>\n

(if no records are kept)<\/td>\n<\/tr>\n

Mixed purposes<\/strong><\/p>\n

(business and private use)<\/td>\n

proportional deduction based on actual business use (for example 80% deductible)<\/td>\n50% <\/strong><\/p>\n

(flat rate, regardless of record-keeping)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The new rules apply only to selected company cars in categories M1, L1e, and L3e (for example, passenger cars, mopeds, and motorcycles). If these cars are used for both business and private purposes, the flat-rate VAT deduction of 50% will apply to:<\/p>\n

    \n
  • purchase, lease, rental, or import<\/strong> of cars<\/strong> in these categories within a defined period (1 January 2026 \u2013 30 June 2028) *<\/li>\n
  • purchase of goods and services related to the operation of these cars <\/strong>of the above categories, such as purchase of fuel, spare parts, accessories, servicing, or maintenance.<\/li>\n<\/ul>\n

    * The new flat-rate VAT deduction for mixed use applies only for a limited period under European legislation, during which a VAT deduction exemption is granted.<\/em><\/span><\/p>\n

    Exceptions to the New VAT Deduction Rules<\/strong><\/p>\n

    The new VAT deduction rules do not apply to certain cars, in particular those that are:<\/p>\n

      \n
    • used exclusively for business purposes <\/strong>= the entrepreneur must keep detailed records for each car individually<\/li>\n
    • used for specific purposes<\/strong> = which are excluded from the special VAT deduction regime. These include cars:<\/li>\n
    • intended solely for sale, rental, or leasing<\/li>\n
    • used for taxi services or driving schools<\/li>\n
    • used as demonstration, test, or replacement cars<\/li>\n<\/ul>\n

      Administrative Obligations<\/strong><\/p>\n

        \n
      • Record-Keeping<\/strong><\/span><\/li>\n<\/ul>\n

        Where a company car is used solely for business purposes, a detailed electronic logbook<\/strong> must be maintained for each car, containing the following information:<\/p>\n

          \n
        • car identification details<\/li>\n
        • odometer readings at the start and end of the reporting period and at the end of each tax period<\/li>\n
        • detailed records of each journey<\/li>\n
        • records of goods and services purchased for the operation of the car<\/li>\n<\/ul>\n

          A key advantage of the new rules is that, for mixed-use car, detailed record-keeping will no longer be required, as the 50% flat-rate deduction applies automatically. However, if the car is provided as an employee benefit, maintaining detailed records remains advisable.<\/span><\/em><\/p>\n

            \n
          • Notification to the Tax Office<\/strong><\/span><\/li>\n<\/ul>\n

            The new rules introduce an obligation for VAT payers to notify the tax office<\/strong> if a company car is used solely for business purposes<\/u> or if one of the exceptions above applies<\/u>.
            \nNotification is also required when changing from the flat-rate deduction (50%) to full deduction (100%).<\/p>\n

            This notification must be submitted for the tax period in which the VAT deduction is first claimed<\/strong> for the purchase or initial lease of the company cars.<\/p>\n

            Impact on Income Tax<\/strong><\/p>\n

            The new VAT deduction rules will also affect tax-deductible expenses related to company vehicles from 1 January 2026. If a company vehicle is used for mixed purposes and the 50% VAT deduction is applied, the non-deducted VAT portion will be treated as a non-deductible expense.<\/strong><\/p>\n

            Impact on Employee Benefits<\/strong><\/p>\n

            Using company vehicles as an employee benefit remains a popular practice. However, this area will also be affected by the new VAT deduction rules. The following provides an overview of the most common form of this benefit.<\/p>\n

              \n
            • Use of Company Vehicles<\/strong><\/span><\/li>\n<\/ul>\n

              Fuel costs related to the private use of company cars (provided that the private use is taxed as a non-cash benefit for the employee) may be included only in proportion to the business use of the car.<\/strong><\/p>\n

              If the company car is used exclusively for business purposes, 100% of the expenses related to its use are tax-deductible, provided that the employee\u2019s benefit is properly taxed as income.<\/em><\/span><\/p>\n

                \n
              • Provision of Company Parking Spaces<\/strong><\/span><\/li>\n<\/ul>\n

                If the employer allows an employee to park in a company car park, this is considered an employee benefit and should be taxed accordingly. In such cases, parking costs are fully tax-deductible<\/strong>, regardless of whether the company vehicle is also used privately.<\/p>\n

                It is essential that the use of parking spaces by employees is properly recorded (tax evidence) and verifiable.<\/p>\n

                This type of benefit may be included under the provision exempting non-cash income up to EUR 500. A detailed internal company policy defining the rules and conditions for the use of parking spaces is strongly recommended.<\/em><\/span><\/p>\n

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