Irish VAT On Passenger Vehicles

July 2018

Most businesses are aware that VAT can be reclaimed in respect of the purchase of a commercial vehicle but may not be aware that an element of VAT can be reclaimed in respect of passenger motor vehicles.

To reclaim VAT on a passenger motor vehicle the following conditions must be met;

  • The vehicle must be first registered for VRT from 1 Jan 2009
  • The CO2 emissions level must be less than 156g/km and
  • The vehicle must be used for at least 60% business use for the first two years.

Where all of the above conditions are met 20% of the VAT on the purchase price can be reclaimed.

However, if the business use falls beneath the 60% in the first two years a portion of the VAT reclaimed will need to be repaid to Revenue.

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