The end of the quarter is drawing closer. Soon you’ll be gathering all your receipts and sending them to your accountant to prepare your next VAT return. But what’s the deal with the VAT on your mobility expenses anyways? We’ll guide you through the rules on how to declare VAT on your car, public transport and shared mobility expenses, and make your admin easier than ever! Stay tuned for a follow-up article on deducting mobility costs from your business income.
Your own car: not as interesting as it used to be
The VAT on car expenses including fuel is only deductible up to 50 percent and is limited to professional use. The percentage of VAT you can deduct on the use of your own car can be determined through one of three formulas:
- actual professional use up to 50% (for which you have to keep careful track of kilometers for professional use only),
- a standard deduction of 35%, or
- in the middle, a rather complex semi-standard deduction.
These formulas apply to regular cars for your own business travel: for larger multi-purpose vehicles higher deductions can apply.Sounds pretty complicated right? You could ask yourself whether having your own car, either bought or leased, is still worth it. Right? Not only because the rules are complex, but also because there are so many limits on how much you can deduct, which will likely become even more stringent in the future.
From a VAT recuperation perspective, for independents living in urban areas it could be a lot more interesting to replace your company car with environmentally friendly alternatives.
Because let’s be honest: when you’re traveling between cities, cars aren’t always the easiest form of transport. Using a train, bus, or even a shared bicycle could get you where you need to go faster. Or better yet, you could combine all three: multimodal mobility.
VAT deduction for other means of transport
Alternative options start looking especially interesting when you look at the percentage of VAT you can recuperate (100%!). Check it out:
- Car sharing: Unlike their privately owned friends, the VAT on shared cars is 100% deductible! That is, as long as you can prove the trip is pure business and that you didn’t use it to go shopping. Note this applies to car sharing services, not carpooling.
- Public transport (train, tram, metro, bus): As far as deductibility goes, public transport is also a solid choice! Note that the VAT on public transport is only 6%. You may not see this because the price you see on the ticket includes VAT. Public transport companies aren’t generally obliged to provide users with a VAT invoice for their tickets. To reclaim the VAT, your normal ticket is sufficient: an exception to the rule.
- Taxi and Uber rides: You can deduct the VAT on your taxi and Uber costs, as long as you can prove it was for professional purposes (that taxi ride home from your friend’s party doesn’t count). The same counts for Uber, but in practice most Uber drivers are considered private citizens and therefore won’t charge you VAT.
- Shared bikes, e-steps and scooters: Same counts here: as long as you can prove you used them for business purposes, the VAT on shared bikes and scooters (and their electric cousins) goes back in your pocket!
Bye bye paper receipts: hello Skipr!
As a freelancer, you don’t want to worry about the administrative hassle for each business trip. Sorting through all that paperwork costs lots of time and money and keeps you from focusing on your business. Integrated mobility apps like Skipr help you stay on top of things while simplifying your admin. Think of it as a one-stop shop for all your trips. From Poppy to Uber and from Lime to MIVB/STIB: compare travel times and costs, plan your journeys and book tickets all with the same app.
You don’t have to worry about keeping receipts for each trip. Skipr sends you or your accountant one monthly invoice to help prepare your VAT return. No more messing around with expense reports or digging into your jacket pockets for crumpled train tickets. Instead just a clear overview with nothing left out.
Ready to streamline your admin and lower your costs? Travel without compromise and try out Skipr, the co-pilot for your business!