Company car in 2025: Everything you need to know
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June 9, 2025
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If you are considering buying or leasing a car for your company, 2025 brings several rules that are good to know before you sign the contract. The following article builds on your background and systematically explains, how to classify a car as an asset, what expenses you can claim, how to proceed with different forms of financing, how to depreciate a car and what to do if you also use it for private purposes.
Financing methods and their tax impact
The financing choice determines whether you depreciate the car or charge a direct lease, as well as when you claim VAT deduction. There are four basic scenarios in play in 2025:
| Financing method | Who is the owner? | Depreciation | VAT deduction upon acquisition |
|---|---|---|---|
| Own resources | businessman | Yes | at once upon purchase |
| Bank loan | businessman | Yes | at once upon purchase |
| Financial leasing | economic ownership entrepreneur / legal landlord | Yes | at once upon takeover (from 1. 1. 2025) |
| Operating leasing | landlord | No (rent included in expenses) | only from rent, on an ongoing basis |
Purchase from own resources or on credit
The car immediately becomes the property of the entrepreneur. It is not recognized as an expense immediately, but gradually through depreciation. The VAT payer is entitled to deduct the entire VAT on the input. The advantage is full control over the vehicle, the disadvantage is a one-time burden on liquidity (when paying in cash).
Financial leasing
This is a lease agreement with the right to purchase. You include the vehicle in your assets upon takeover and depreciate it in the same way as when you buy it. A new feature from 1 January 2025 is the right to deduct the entire VAT immediately upon takeover (no longer gradually from the installments). Tax expenses include depreciation, interest and operation; the principal of the installments itself is not an expense.
Operating leasing
The lessor is the owner throughout the lease term. The entrepreneur pays the rent, which is charged directly to expenses; the vehicle is not depreciated. VAT can only be deducted from the rent payments and only in proportion to the business use. After the contract ends, the car usually remains with the lessor.
Vehicle depreciation
If a car becomes the property of an entrepreneur (purchase, loan, financial leasing), it must be classified as long-term tangible assets and depreciated:
Regular passenger cars belong to the 1st depreciation group – standard 4 years evenly.
Electric cars and plug-in hybrids (BEV, PHEV) they belong to the 0th depreciation group and are depreciated in 2 years (50 % of the acquisition price per year).
Microtaxpayer can use any amount of depreciation (up to the entry price) and, for example, depreciate the entire vehicle in the first year.
Vehicles up to €1,700 are not long-term assets - their acquisition price can be included in expenses as a one-time expense if they serve exclusively for business purposes.
Example: If the sro registers a vehicle in January 2025 for €24,000 excluding VAT, it can depreciate it for tax purposes at €6,000 per year (4 years). If the accounting decision is for a 6-year useful life (at €4,000 per year), in the years 2025–2028 the tax depreciation will be higher than the accounting depreciation and the tax base will be reduced by €2,000 per year. In the years 2029–2030 the situation will be reversed and the tax base will increase.
Luxury vehicles
If the purchase price of a passenger car exceeds €48,000, it is considered a luxury and tax depreciation is limited:
maximum €12,000 per year (i.e. straight-line depreciation of €48,000 over 4 years),
for a luxury electric car, double – €24,000 per year.
If the entrepreneur has a lower tax base than the depreciation limits, he must adjust it upwards by the difference between the actual and limited depreciation. In addition, in the case of an operating lease, the rent is tax deductible only up to €14,400 per year (in the case of a contract without an agreed purchase option).
Fuels – four recognized methods in 2025
| Method of application | Short description | VAT (payer) |
|---|---|---|
| Consumption × kilometers | The cost depends on the consumption stated in the technical certificate (increased by 20 %) and the km driven on business; records of journeys are required. | 100 % VAT can be deducted if the car is used exclusively for business. |
| GPS (satellite tracking) | The electronic system records both the route and actual consumption, replacing the classic logbook and enabling accurate cost calculations. | Also full VAT deduction for exclusively business use. |
| Flat rate 80 % | The simplest option: 80 % of the value of fuel actually purchased is included in tax expenses, 20 % remains non-taxable; it is enough to record the speedometer reading at the beginning and end of the year. | Only 80 % VAT can be deducted from the documents. |
| Home charging of an electric car | The expense is determined as the kWh consumption from the technical certificate multiplied by the average electricity price announced by the Statistical Office of the Slovak Republic; suitable for charging a company BEV/PHEV at home. | As a rule, there is no right to deduct VAT, as it is domestic (private) energy consumption. |
Company car for private trips
Self-employed or LLC (car owned)
Proven utilization ratio
Costs (depreciation, service, insurance, fuel) are calculated based on actual kilometers driven.
Flat rate 80 %
Easier choice: 80% of actual costs are tax deductible without the need for trip books, the rest is not.
Please note: VAT payers cannot use the 80 % flat rate to deduct VAT (except for fuel). They must therefore prove the actual business relationship until the planned 50 % flat rate deduction is introduced.
Employee and non-cash income
If the employer also assigns a vehicle for private trips, the employee receives a taxable benefit:
1 % from the entry price for each (even started) month for regular cars,
0,5 % for electric cars and plug-in hybrids.
The amount is calculated for seven years, with the entry price decreasing by 12.5 % each year. After eight years, non-cash income no longer arises. The contribution is added to the gross salary and is subject to tax and contributions, except in cases where the total non-cash benefits do not exceed €500 per year. The agreement on use for private purposes must always be in writing.