Ing. Viktória Horáčiková
Tax Advisor
As of January 1, 2026, a significant amendment to the VAT Act will enter into force, fundamentally affecting all businesses using passenger vehicles. Slovakia is introducing a flat-rate VAT deduction of 50 % for passenger motor vehicles in category M1, as well as motorcycles in categories L1e and L3e, if they are not used exclusively for business purposes – or if the taxable person cannot prove that they are used solely for business.
These changes are the result of a derogation approved by the European Union (Council Decision (EU) 2025/852) and will apply until June 30, 2028.
Why is this change being introduced?
According to the explanatory memorandum, the new regime has two main objectives:
- to reduce the administrative burden on businesses,
- to prevent tax evasion.
Entrepreneurs will therefore have a choice – either apply a 50 % flat-rate VAT deduction on motor vehicles without the need to provide any proof, or opt for a 100 % VAT deduction combined with detailed electronic record-keeping, which must be made available to the tax authority upon request.
Two options: 50 % flat-rate or 100 % with record-keeping
Flat-rate VAT deduction (50 %)
- Intended for vehicles used for mixed purposes (business and private).
- Or if you prefer not to keep detailed electronic records.
- No need to prove the extent of business use – no logbook required.
- Applies also to fuel, servicing, leasing, and other vehicle-related expenses.
- Enables simpler bookkeeping and eliminates the need to tax private use for VAT purposes.
- Suitable for those who prefer less administrative burden, even at the cost of a lower deduction.
Full VAT deduction (100 %)
- Possible only if the vehicle is used exclusively for business purposes.
- Requires detailed electronic journey records, including:
- VIN, license plate number, routes, mileage, driver, and purpose of the trip
- Odometer readings at the beginning and end of each trip
- Records of all vehicle-related purchases (fuel, repairs, etc.)
- The taxpayer must notify the tax authority of each vehicle for which a 100 % deduction is claimed.
- Obligation to update records if the vehicle’s use changes.
- Suitable for companies willing to accept increased administration in exchange for a full deduction.
Who is exempt from record-keeping?
Certain professions or business models benefit from a simplified regime. If a vehicle is used, for example, for taxi services, operational leasing, driving schools, or the transport of passengers or goods, there is no requirement to keep a logbook. However, the notification duty towards the tax authority still applies.
Which transactions fall under the 50 % regime?
The flat-rate applies to:
- Purchases of investment assets (except for resale)
- Operational leasing and long-term rentals
- Vehicle operating expenses (fuel, repairs, spare parts, etc.) – this also applies to cars purchased before January 1, 2026, provided they are used for mixed purposes in the relevant period.
What this means for businesses and accountants?
Who will simplify their lives:
- Small entrepreneurs who use their vehicles for both business and private purposes
- Those who do not want to “play around” with logbooks
- Entities that accept a 50 % VAT deduction in exchange for less paperwork
Who will face more work:
- Companies aiming for a full deduction
- Taxi services and driving schools – they must report vehicles with 100 % deduction already in the first tax period
- Accountants – they face increased administrative tasks, different reductions for income tax deductibility and for VAT deductions
For support with the new VAT regime on cars, you can contact us at info@emineopartners.sk and our tax advisors will help you set up a system that is beneficial, sustainable, and – most importantly – free of unnecessary problems with the tax authority.
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