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28Oct

New VAT regime for company cars: extra VAT and red tape

The VAT administration published on 25 October 2011 its new position on the VAT deduction rules for company cars.

Up to now and in general, the VAT deduction on company cars was limited to 50% while additional VAT was due on the private use.

According to the new position, the VAT deduction should be limited in function of the actual use of the car (non-professional km/total km per year ratio). For this calculation, the home-work journey is considered non-professional, so that the VAT deduction ratio is likely to be negatively impacted and fall under 50%.

The VAT administration intends to apply this position retroactively as from January 2011.

If you are interested to learn more about the the VAT technical aspects of this change, more information will be provided during our ITX academy session on 15 November 2011 (http://www.pwc.be/en/indirect-tax-academy/agenda.jhtml).

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Posted: October 28th, 2011