As a self-employed person, you are constantly searching for ways to optimise your operating costs. One of the options you may consider in this regard is buying a light cargo instead of a passenger car. But what are the tax and financial benefits? In this article, we take a closer look at this issue so that you can make an informed choice. Let’s dive into it together! 🚚
Note: Your light cargo company car must meet the conditions before you can enjoy the benefits!
Tax advantages of light cargo company car versus a passenger car ✅
It is mainly the tax and financial benefits that make a light truck attractive for entrepreneurs and the self-employed. We briefly list the benefits for you, compared to passenger car regulations:
1️⃣ Full deductibility of costs
The costs associated with a passenger car are only deductible for your business to a limited extent, depending on the CO2 emissions. This is tax limitation that the tax authorities always apply. In fact, by 2028, costs for new fossil-fuel passenger cars will no longer be deductible at all.
For a light cargo , on the other hand, all costs are 100% tax deductible, regardless of emissions. Attention, a limitation in function of professional use will of course still apply!
2️⃣ Higher VAT deduction possible
VAT on the purchases and costs of a passenger car is only recoverable according to business use, with a maximum of 50%. And for that 50% VAT recuperation, you already have to keep strict trip records. Don’t feel like keeping a trip record? Then you are only entitled to 35% VAT recuperation, if there is also at least 35% professional use % of course!
But for a light cargo, you can go up to 85% VAT recuperation, which is a lot higher. Of course as long as there is also at least as much professional use.
3️⃣ Lower road tax and no VAT
Finally, for a light cargo, you don’t have to pay vehicle registration tax (ACT) and the yearly road tax will be a lot lower than for a passenger car.
Tip
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A light cargo as a company car: which options will you choose? ⚖️
It is clear that a light cargo as a company car can offer a lot of advantages for your business. On the other hand, your vehicle must meet the specific conditions to qualify as a light cargo.
So carefully weigh up what is the best choice for your situation: a light cargo or still a passenger car. 🤜🤛
