VAT12/07/11 / cata_tax-news

The value added tax paid by the employer for a motor vehicle used by an employee for private purposes shall constitute a tax deductible expense under certain conditions.

On the basis of the meeting of the Ministry of Finance Coordination Committee and the Chamber of Tax Advisors of the Czech Republic, the GFD confirmed that VAT recognized by the employer for the use of motor vehicles by its employees shall constitute a tax deductible expense on condition that such expenses are deemed to constitute the so-called employee benefit. In other words, the employees’ right to use motor vehicles must be stipulated in the employment agreement, collective agreement or internal rules and/or policies.