How does VAT deduction work for electric company cars?
VAT deduction at electric commercial vehicles works the same as for regular company cars: you can reclaim the VAT paid in full if you use the car for business purposes. The same conditions apply to electric vehicles, but you benefit from additional tax advantages such as a lower additional tax rate and no BPM levy. This makes electric company cars more financially attractive than ever.
What is VAT deduction and how does it work with electric company cars?
VAT deduction means that, as a business owner, you can reclaim the VAT you pay on business purchases from the tax authorities. For electric company cars, you can get the full VAT back, provided you use the vehicle for business purposes and are liable for VAT.
The difference with regular company cars is not in the VAT deduction itself, but in the additional benefits. Electric commercial vehicles have been given an even more favourable tax environment since January 2025 with the introduction of BPM on diesel vehicles. This makes electric driving more financially attractive.
For entrepreneurs, this means concretely that for an electric company car of €30,000 including VAT, you can reclaim around €5,289 in VAT. This deduction applies to both purchase and lease, although the conditions may differ for each form of financing.
What conditions must your company car fulfil for VAT deduction?
Your electric company car must be used entirely for business purposes to reclaim the full VAT. In case of mixed use (business and private), you can only deduct the business percentage. The vehicle must be registered in your company's name or in your name as an entrepreneur.
In addition, you must be liable for VAT and the vehicle must meet the definition of a commercial vehicle. This usually means a maximum permissible weight of 3,500 kg and equipment suitable for transporting goods or providing services.
It is also important that you keep good records of all documents. You need a valid invoice that shows VAT separately, and you need to be able to prove that the vehicle is actually used for business purposes. A trip log can help with this, especially with mixed use.
How much VAT can you reclaim on an electric company car?
You can reclaim 21% VAT on the purchase price of your electric company car, provided it is used entirely for business purposes. For a vehicle of €40,000 including VAT, this means a refund of €6,942. The same percentage applies to used electric company cars, as long as the seller is liable for VAT.
A practical calculation example: if you buy a new electric van for €35,000 including VAT, you actually pay €28,926 excluding VAT plus €6,074 in VAT. You can reclaim that €6,074 in full from the tax authorities.
With second-hand purchases, the situation is different. If you buy from a private individual, there is no VAT in the price and you cannot reclaim anything. If you buy from a VAT-registered dealer, you can reclaim VAT on the selling price. Pay close attention to the invoice and whether the VAT is listed separately.
What are the differences between leasing and buying for VAT deduction?
With financial leasing, you can reclaim VAT on the monthly instalments, whereas with purchasing, you get the full VAT back in one go. Financial leasing therefore spreads the VAT benefits over the term of the contract, which can be beneficial for your cash flow.
With direct purchase, you get a big VAT refund in the first quarter after purchase. This gives a big boost to your liquidity, but you need the full purchase amount. With leasing, you pay monthly and also get a monthly VAT refund via your VAT return.
Operating lease works differently: here, VAT is included in the monthly costs and you can simply deduct it as a business expense. You do not then own the vehicle, but have certainty about the monthly costs, including maintenance and insurance.
How Van den Hurk helps with electric commercial vehicles
We guide you through the entire process of VAT deduction at electric commercial vehicles. Our experience of more than 60 years in the commercial vehicle industry helps you make the right choices for your specific situation.
Our concrete support includes:
- Personal advice on VAT deduction and tax advantages of electric company cars
- Explaining different financing options and their VAT implications
- Assistance in preparing the right documentation for the tax authorities
- Transparent prices and clear invoices with correct VAT overview
- Guidance on transition from diesel to electric driving
With our large stock of electric commercial vehicles and flexible leasing options, you will always find a solution that suits your business and budget. Contact us for personal advice on VAT deduction and the best financing option for your electric company car.
