Slovak Authorities Tighten VAT Deduction Rules for Car Purchases
04.11.2025
From 1 January 2026, new tax regulations will come into effect in Slovakia, significantly changing the procedure for entrepreneurs to obtain a value-added tax (VAT) deduction on passenger cars.
What exactly is changing
The state is introducing a fixed VAT deduction rate of 50%, which will apply to both the purchase of vehicles and their operating expenses.
The new rule applies to cars and motorcycles in categories M1, L1e, and L3e, regardless of how often they are used for work or personal purposes. This means that even if an entrepreneur uses the vehicle exclusively for business, they will only be able to reclaim half of the VAT unless they maintain electronic records of trips.
The 50% deduction limit will apply not only to the purchase of the vehicle but also to all related expenses — fuel, repairs, maintenance, insurance, leasing, parking, and motorway vignette payments.
How to maintain a full tax deduction
Under the new rules, even those who use the vehicle 90% for business purposes will only be able to deduct half of the tax amount. A full deduction will only be possible with documented evidence of the vehicle’s exclusive use for business.
To allow an entrepreneur to reclaim the full VAT, they must meet three main conditions:
- officially notify the tax office that the vehicle is used exclusively for business purposes;
- maintain electronic records of trips in accordance with established requirements;
- confirm the business use of the vehicle throughout the entire period.
Electronic records for the tax office must contain the following information:
- VIN and registration number of the vehicle,
- type of vehicle,
- initial and final mileage,
- detailed report of each trip (date, purpose, driver, route, mileage),
- list of expenses related to operation.
Records can be kept in Excel, PDF, or specialised software, but the entrepreneur will be required to provide the data to tax authorities in electronic form.
Importantly, if the vehicle is used even partially for personal purposes, only a 50% deduction applies, with no possibility of proportional calculation (e.g., 70% for business and 30% for personal use).
What this means for business
The new rule will simplify administration for tax authorities but may increase the burden on entrepreneurs, especially those who actively use vehicles for business trips.
According to experts, the fixed 50% deduction will lead to an increase in the actual transport costs for businesses and make keeping electronic records of trips practically mandatory for anyone wishing to reclaim the full VAT.