In terms of vehicles, VAT deductions are limited to 50% when vehicles are no longer used exclusively for business purposes (versus 100% for exclusive business purposes). VAT deductions apply to its purchase, when it is an intra-communitary acquisition, it is imported, rented or leased. This is true also for any other expense related to the vehicle (such as: gas, tolls etc.).
The limitation of 50% VAT does not apply to:
- emergency service vehicles, security services, protection services and messenger services;
- vehicles used by outisde sales reps;
- vehicles used for the transport of paying people (taxi, for example);
- vehicles used for billed services such as those used in driving schools;
- vehicles considered merchandise for a commercial purpose.
Limited deduction rights also does not apply to transport vehicles with a total authorized weight surpassing 3,500 kg or vehicles with more than 9 seats.
Charges linked to vehicles which have an authorized total weight of less than 3,500 kg or which have fewer than 9 seats, and which are not used exclusively for business purposes are deductible only up to 50%.
The 50% limit does not apply to depreciation charges which are limited to 1.500 RON per month per vehicle.
These two limits nevertheless do not apply to charges for the following vehicles:
- emergency service vehicles, protection or security (exclusively)
- outside sales representative vehicles
- taxis and driving schools
- vehicles bought only to be resold
Updated: March 2013