The VAT Law allows for the possibility of deducting the input tax related to the acquisition or importation of goods and services directly connected to affected assets.
In response to a binding inquiry dated 07/10/21, regarding a question concerning the VAT on expenses for a vehicle that is used in the professional activity of the individual, even if it is not owned by them.
“The use of a vehicle that is not owned by a self-employed individual engaged in economic activity allows for the deductibility of expenses for the purchase of fuel or for repairs, as well as any repairs or maintenance to which the vehicle is subjected.” All of this is because these are expenses unrelated to the acquisition of the vehicle.
It is important to consider that the input tax incurred for refueling will be deductible as long as its consumption is directly related to the development of your professional activity. Similarly, expenses related to repairs and/or maintenance can be deducted based on the same provision, as well as toll payments.
We emphasize in this article that what matters is the direct and exclusive connection of an asset to the professional activity. This degree of utilization must be substantiated by the taxpayer through any reliable means of proof recognized in law.
