Input tax for cars, estate cars and motorbikes

With a few exceptions, no input tax can be claimed on cars, estate cars and motorbikes, either for purchasing or renting or for ongoing running or maintenance costs (e.g. fuel, maintenance, repair, toll charges, motorway stickers, train loading), since the services listed are not eligible for input tax deduction pursuant to the law (section 12 paragraph 2 (2b) of the Umsatzsteuergesetz – UStG). Even in cases where the person liable for payment uses a car 100 per cent for business purposes (e.g. as a sales representative), the regulations on input tax deduction apply.

Exceptions to the input tax exclusion are, however, driving school vehicles, demonstration vehicles and vehicles that are intended exclusively for commercial resale, and those vehicles which are used for commercial transport of persons or commercial leasing at least 80 per cent of the time.

In the case of vehicles that are explicitly classified as vans, delivery vans, flatbed trucks or small buses ("fiscal commercial vehicles") and that therefore are not classed as cars or estate cars, there is the option to deduct input tax. An up-to-date list of vans, delivery vans, flatbed trucks and small buses that are recognised for tax purposes, together with the Regulation on which this is based can be found on the Federal Ministry of Finance’s website.

In principle, evidence of whether these requirements are met for a specific vehicle would therefore be provided by the person liable for taxation, who is claiming input tax deduction for a particular vehicle. In the interests of legal certainty and administrative simplification, the Federal Ministry of Finance does, however, recognise specific vehicle types such as vans, delivery vans, flatbed trucks and small buses within the meaning of this regulation. For these types of vehicles, the person liable for taxation is not required to provide evidence.

Where tax deduction is claimed for vehicles eligible for tax deduction, in order to expedite proceedings – in particular during the VAT refund procedure – it is recommended that documents (copy of vehicle registration document/data sheet/vehicle log book) are submitted together with the original invoices when the application is made; these documents will show that the vehicle is not excluded from the right to deduct tax.

There is an exception to the input tax exclusion for cars and estate cars for those vehicles that have CO₂ emissions of 0 grams per kilometre (e.g. those with exclusively electric or electro-hydraulic engines) (section 12 paragraph 2 (2a) of the UStG 1994). The appropriateness threshold is, however, significant for these cars and estate cars (see appropriateness legislation on cars) (see section 1 paragraph 1 (2a) or section 12 paragraph 2 (2a) of the UStG 1994).

Further links

List of vans, delivery vans, flatbed trucks and small buses eligible for input tax deduction (→ BMF)^{German text}

Legal bases

• Sections 1 and 12 of the Umsatzsteuergesetz (UStG)
• Verordnung des Bundesministers für Finanzen betreffend die Angemessenheit von Aufwendungen im Zusammenhang mit Personen- und Kombinationskraftwagen (PKW-Angemessenheitsverordnung)