What is input tax?

Input tax refers to the VAT you pay on purchases made for your business. This includes your company vehicle. You can reclaim this VAT during your VAT return, usually filed quarterly. Made a mistake in your VAT declaration? You can correct it in your next return – this is known as a correction.

For example: if you buy a company vehicle for €25,000 excluding VAT, and the VAT amounts to €5,250, you can reclaim that VAT if the vehicle is used for business purposes. A smart saving!

When can I deduct VAT?

VAT is only deductible as input tax when:

You’re considered an entrepreneur by the tax authority meaning you run an independent business and generate (or expect to generate) profit.

The purchase is made for your business, or you can demonstrate the business use.

The expense is related to activities that are subject to VAT.

Please note: for vehicles, this isn’t always the case. If you buy a margin vehicle, different rules apply.

A margin vehicle is a used company vehicle for which no VAT is shown on the invoice, because the seller couldn’t deduct VAT on purchase (e.g. when bought from a private individual or a non-VAT registered party).

With a margin vehicle, you only pay VAT on the profit margin, not the total purchase price and you cannot reclaim VAT because it’s not stated on the invoice.

Always check whether the vehicle you’re buying is a margin vehicle or a VAT vehicle. Margin vehicles often appear cheaper, but you won’t benefit from VAT deduction.

Lease costs and VAT

If you lease your company vehicle, you can also deduct the costs from your profits. But it’s important to separate the VAT and the lease costs in your bookkeeping. Whether you can record the vehicle’s value on your balance sheet depends on the type of lease:

Financial lease: yes, you may include it on the balance sheet.

Operational lease: no, it remains off-balance.

Why leasing is an interesting option for your business

Leasing is attractive for many entrepreneurs because it allows you to drive a new company car without a large upfront investment. Instead, you pay a fixed monthly fee, giving you predictable costs and preserving capital for other business needs.

What’s more, both the monthly costs and the VAT are deductible, giving you clear tax benefits and improving your cash flow.

Operational leasing also comes with other fiscal advantages:

The vehicle stays off your balance sheet, which helps keep your financials lean.

You don’t need to record depreciation.

All costs are listed as business expenses.

In short, while the vehicle isn’t officially yours, you can use it as if it is and save money on paper and in real terms.

Business and private use

Do you use your company vehicle for both business and private purposes (e.g. commuting)? Then you can only reclaim VAT on the business portion. This must be correctly reflected in your VAT return, either by actual private use or per business kilometers driven.

You can also choose to add the vehicle to your private assets. In that case, you may only deduct VAT on the portion used for your business including fuel and maintenance.

Additional tax liability for private use

If you use your business vehicle privately, you’ll face company car tax. If you drive more than 500 kilometers privately per year, the tax authority considers it private use.

You’ll then pay tax on the benefit you receive. The company car tax is based on the vehicle’s list price.

Avoid this by demonstrating 100% business use, this is only possible with trip registration.

Incomplete administration can lead to fines and back taxes.

Saving costs when purchasing a company vehicle

Besides VAT refunds, there are other ways to save money at BAS World:

Save money – get a company vehicle without BPM

From 1 January 2025, entrepreneurs will no longer be exempt from BPM (Private Motor Vehicle and Motorcycle Tax). This means new company vehicles registered from 2025 onwards will be subject to BPM. BAS anticipated this change and registered a large number of brand-new company vehicles in 2024. These vehicles are new, with only around 10 km on the clock, but were registered under the 2024 rules. This means you can still buy one without paying BPM, saving you a significant amount.

Large selection of new and used company vehicles

At BAS World, you’ll find a wide range of used and new company vehicles. Thanks to our global buying power, we purchase in large volumes under favourable terms – and pass those benefits on to you. New vehicles lose value quickly. A used van is often just as reliable and much more affordable, especially since most depreciation occurs in the first years.

Buy at the right time and save on depreciation. It is a smart move for your accounting and when you resell your van later.

Make the most of your VAT benefit as an entrepreneur

Plan major purchases around your VAT return

Buy your company vehicle just before your VAT return. This way, you can reclaim the VAT quickly which will improve your liquidity. You get the money back from the tax authority faster.

Choose VAT-deductible vehicles

At BAS World, many vehicles are subject to VAT. Each listing clearly shows whether VAT is included and deductible. Always choose a VAT vehicle if you want to reclaim VAT. With a VAT-exempt vehicle, there’s nothing to reclaim.

Keep track of private use

If you also use your company vehicle privately, keep proper trip records. This helps you clearly separate business use and simplifies VAT deduction.

Combine maintenance smartly

Plan maintenance, repairs, and fuel smartly because you may also be able to reclaim VAT on these expenses. As long as it’s for business use, you’re saving not just on the purchase, but also on running costs.

Handled smartly, your VAT benefit becomes a strategic tool for reducing costs and improving cash flow. With BAS World, your next company vehicle becomes a clever investment. Contact us or browse our stock directly.