VAT deduction for cars from January 1, 2026
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September 29, 2025
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On 25. 9. 2025 the third package of consolidation measures was approved, which includes VAT deduction limitation for company vehicles also used for private purposes. Slovakia has gained European exception (EU Council Implementing Decision of 14. 4. 2025). The exemption is valid until 30. 6. 2028 and may be extended; if the Slovak Republic wishes to continue, until 30. 9. 2027 The Ministry of Finance justifies the measure by seeking to limit long-term abuse and reduce the administrative burden.
Basic rule
A VAT payer who from 01. 01. 2026 to 30. 06. 2028 (inclusive):
will acquire investment property – passenger car categories M1, L1e or L3e, or
will the vehicle use under a lease agreement other than short-term (or similar contract),
will claim VAT deduction only to the extent of 50 %. This reduction concerns vehicle purchase also all related goods and services (service, fuel, tires, washing, etc.).
Which vehicles are affected and what is a "capital asset"„
Investment property is a movable thing with an independent technical and economic purpose, whose the purchase price excluding VAT exceeds €1,700. The regime includes:
M1 – passenger cars intended for the transport of persons with a maximum of 8 seats excluding the driver,
L1e – light two-wheeled vehicles (up to 50 cm³ or up to 4 kW),
L3e – motorcycles and two-wheeled vehicles without a power limit.
Out of mode are trucks, vans, trailers and other categories as M1/L1e/L3e and vehicles up to €1,700.
The moment of acquisition is decisive
When entering the regime, it is crucial acquisition of the right to dispose of as an owner (not registration, not assignment of a license plate number).
Model situation: A company buys a car with a delivery date on the invoice 28. 12. 2025 and from this day on he is the owner, although the vehicle is at the dealer's without a license plate. The new reduction will not apply. – proceeds according to the previous rules.
Exceptions: when 50 % does not apply (100 % deduction)
Halving does not apply, if the payer vehicle acquired or used exclusively:
for the business, which is short-term rental or other than short-term rental passenger cars,
for the business, which is transport of persons and their luggage for consideration (including taxi service),
for the business, which is operating a driving school, if it is training vehicle,
how demonstration, test or replacement passenger vehicle.
The reduced claim is will not apply even if the payer acquired the vehicle as a capital asset exclusively for business purposes or vehicle used exclusively for business and knows about it detailed records.
Reporting obligation at 100 % deduction
If you apply 100 % deduction, you are obliged to notify the tax office within the deadline for filing the return for the period in which you claimed 100 %. Without proper records, there is a risk that the tax administrator will not recognize the claim during an inspection.
Mandatory registration for 100 % (electronically, for each vehicle)
Records are kept electronically, especially for each vehicle acquired and contain at least:
VIN, license plate number, name and type vehicles,
speedometer status on the day of registration, at the end each tax period and on the day of termination of registration,
record of every ride: serial number, driver's name and surname, start/end date and time, purpose of the trip proving business, start and finish location, number of kilometers driven, odometer reading before a after every ride,
records of purchased goods and received services to the operation of the vehicle (specification, price excluding VAT, date).
Upon request of the tax administrator, records must be made available by electronic means. Administrative burden when targeting 100 % teams is growing significantly.
Income tax implications
Amendment does not change basic principles of applying expenses under the Income Tax Act (e.g. depreciation). Exception: transitional provision § 52zzzk – VAT not applied from the period 01.01.2026 – 30.06.2028:
is not a tax expense,
not included in the purchase price vehicles,
cannot be tax-deductible.
This means that the "forfeited" half of the VAT is can't save through costs.
Examples and calculations
8.1 Purchase in 2026, mixed use
Purchase price: 20 000 €, VAT 4 600 €.
– New mode: you will subtract 2 300 € (50 %). All related VAT (PHL, service, tires, car wash…) also only 50 %. Not applied VAT part is not tax expense.
– Old mode (comparison): at a real ratio of 90 % business / 10 % private, the deduction would be 4 140 €. Difference from the new regime: 1 840 € already when purchasing.
8.2 Sale of a vehicle within 5 years (adjustment of deducted tax)
If a vehicle with a 50 % deduction you will sell within 5 years from the acquisition, it will be carried out adjustment of tax deducted ("reading").
Model: purchase deduction 2 300 €, sale a year later → additional deduction €1,840 according to the legal formula. On sales, VAT is applied from the entire tax base (rate used in the example 23 %).
8.3 Moment of acquisition – impact on the regime
Purchase with delivery date 28. 12. 2025 → without reduction according to the amendment (procedure according to the previous rules), even if the vehicle does not yet have a license plate and is at the dealer.
What remains unchanged for vehicles already purchased and what may come
For vehicles purchased by 31. 12. 2025 amendment does not indicate changes. Since many questions arise in practice, it is expected methodological guidance. Mode 50 % is set to today 01.01.2026 – 30.06.2028; its extension will depend on the decision after the request of the Slovak Republic.