Can I deduct VAT when using my car for business?
Car insurance is normally done on the basis of the catalog value of the car. When insuring a business car, you can offset VAT. The catalog value is then reduced by the VAT. You can thus qualify for a lower premium on your car insurance.
Benefit on your premium
As soon as you are liable for VAT, the catalog value and/or market value can be reduced by the VAT amount. You can offset the VAT part in a claim against the tax authorities and the insurer will not have to pay this part. Since the value of your car is a premium determining factor, in many cases the premium will be lower because you do not have to pay the VAT amount. This rule applies regardless of whether you have taken out the insurance including or excluding VAT.
VAT in case of any damage
If it is determined that you can offset VAT, the insurer will always pay out claims payments exclusive of VAT. This means that the VAT charged by a bodyshop for a repair must be paid by yourself. You can reclaim this VAT from the Tax Office.
Changing your car insurance policy
If you want to change your car insurance to the insured value excluding VAT, please inform us using the link in the email you received from us. Are you unable to work this out? Please contact us at 088-6883712.
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