TEAC Resolution on VAT Deduction for Mixed-Use Vehicles Leased to Employees: Criteria and Ruling

• TEAC resolution regarding the deduction of VAT on vehicles provided to employees for mixed use
• Taxpayer must prove the vehicle’s allocation to business activities to deduct VAT
• TEAC analyzed a case where a company provided vehicles to employees for both business and personal use
• Company initially deducted 50% of VAT on leasing these vehicles
• Administration questioned the deduction based on availability and allocation criteria
• TEAC partially upheld the Administration’s regularization, but annulled the 50% deduction
• Lack of sufficient evidence of actual business use led to reduction in deductible VAT
• Indirect evidence and proportional deductibility were key legal principles in the decision
• Presumption of 50% allocation to business use must be supported by concrete evidence
• Criteria of availability outside of work hours used to determine personal use
• Only portion of vehicle used for business activities should be deductible, not automatically 50%

Source: audiconsultores-etlglobal.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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