Belgium: VAT deduction for mixed-use cars; adjustment to calculation for 2020

Belgium: VAT deduction for mixed-use cars

Relief is provided to taxpayers with regard to input value added tax (VAT) deductions related to cars used for personal and business purposes for 2020.

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In general, there are three methods available to determine the business use of cars (for VAT purposes) and the right to deduct input VAT on expenses incurred in relation to these cars:

  • Method 1—The VAT-able person keeps a daily journey or log.
  • Method 2 “semi-presumptive”—The business use is calculated on the basis of a specific formula developed by the tax authorities. The formula determines the percentage of personal use, from which the percentage of business use can be determined.
  • Method 3 “presumptive”—The business use is determined at a presumptive rate of 35%.  

Relief for calendar year 2020

Due to the exceptional situation created by the coronavirus (COVID-19) pandemic-related lockdown and teleworking by many employees, the formula in the “semi-presumptive” calculation method is skewed.

Therefore, VAT payers who normally use Method 2 can exercise their right to deduct under the general presumptive rate of 35% (of Method 3). VAT-able persons then may combine the “semi-presumptive” method and the “presumptive” method, despite the fact that this is normally not allowed. Except for the timing relating to the application of Method 3 (see below), the other conditions for the application of Methods 2 and 3 remain unchanged.

These measures only apply to calendar year 2020.

Relief for calendar year 2021

For calendar year 2021, the concerned VAT-able persons can use again the “semi-presumptive” method and do not have to take into account the obligation to use the general presumptive rate of 35% for at least four calendar years.


Read a March 2021 report prepared by the KPMG member firm in Belgium

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