Here are some additional rules if you have a company car

The flat-rate deduction for motor vehicles is reduced to 50 percent. These are further changes in the field of value added tax.

A temporary flat-rate 50 percent VAT deduction on the purchase and operation of a motor vehicle is now in effect if it is used for both business and private purposes. The changes apply to motor vehicles in categories Ml, i.e., passenger cars, Lle, and L3e, i.e., motorcycles.

Vehicle purchase

Temporary introduction of a flat-rate 50% claim for deduction of value added tax on the purchase and operation of a motor vehicle if it is used for both business and private purposes. The changes apply to motor vehicles in categories M1 (passenger cars), L1 and L3e (motorcycles). The taxpayer is still obliged to take into account the provisions of the Value Added Tax Act; if, according to the coefficient, the taxpayer's entitlement to deduct value added tax is less than 50 percent, they may only deduct the lower tax. Non-deductible value added tax is not a tax expense for income tax purposes either. The provisions on the proportional deduction of value added tax on the purchase of the above-mentioned goods and services and the adjustment of the deduction of value added tax remain unaffected. This means that if a taxpayer supplies goods and services that are exclusively exempt from value added tax without the right to deduct tax, or if the taxpayer has a value added tax coefficient of less than 50 percent, they cannot claim a 50 percent deduction of value added tax on purchased goods and services for motor vehicles.

Excluded vehicles

The following motor vehicles used exclusively for business purposes are excluded from the above restriction: short-term rental, i.e., rental for up to 30 days, transportation of persons and their luggage, including taxi services, operation of a driving school if the motor vehicle is used as a training vehicle, and if it is a demonstration or test vehicle or a replacement vehicle provided to a customer during vehicle repair and maintenance. The above restrictions do not apply to vehicles used 100 percent for business purposes or commercial vehicles. The use of motor vehicles exclusively for business purposes or for activities that are excluded must be reported to the tax administrator on a one-off basis. If these vehicles are also used for private purposes or for purposes other than those for which they were purchased, the taxpayer shall also notify the tax administrator of this fact. The taxpayer must keep detailed records of the use of the motor vehicle in electronic form for each vehicle separately. The records shall include, among other things, details of each trip, the time of its commencement and completion, the mileage traveled, the person who used it, the purpose of the trip, and the place of commencement and completion of the trip. Most of this information is provided by GPS records.

Electronic form

It is up to the taxpayer to decide which electronic form to use for keeping records of journeys, whether in Excel, Word or another format, and there is also no specified storage location for keeping records of journeys. The important thing is that it will be possible to make these records available to the tax office electronically. In order to claim a 100% VAT deduction on fuel and other expenses related to the operation of a car, in addition to electronic driving records, purchase documents ,i.e., receipts and invoices, will continue to be required.

In any case, the taxpayer must provide these records to the tax administrator upon request. The entire change in the deduction system described above results from Slovakia's decision to use the exemption based on the implementing decision of the European Council and to introduce a mandatory flat-rate value added tax deduction of 50 percent of expenses for fuel, procurement, technical improvement, operation, repairs, and maintenance of selected motor vehicles, regardless of the actual ratio of use of these vehicles for business and private purposes. Even entrepreneurs who use passenger cars and related goods or services for their operation exclusively for business purposes will generally not be able to claim the full amount of value added tax deduction without detailed records of journeys.

However, this change violates the principle of tax neutrality. Although the government says that the aim of the change is to reduce the administrative burden on entrepreneurs associated with the obligation to keep detailed records of journeys, but it is primarily an effort to prevent tax evasion that occurred due to the unauthorized application of value added tax in full, even in cases where motor vehicles are also used for private purposes. On the other hand, the change has created a problem in that entrepreneurs who use their cars predominantly, i.e., in a ratio of approximately 80 or 90 percent, for business purposes will be able to deduct value added tax from expenses for the purchase, operation, technical improvement, repairs, and maintenance of vehicles. They will not be entitled to deduct a higher amount of value added tax even if they decide to keep a logbook and prove that they use the car more for business than for private purposes. In short, the state only accepts 100 percent use of the car for business purposes with a special electronic logbook or allows only a 50 percent deduction. This is a violation of the tax neutrality that is characteristic of the value added tax system.