restriction mainly means that when purchasing or using an automobile for
business purposes through a contract of use (including renting or leasing),
input value added tax can be deducted to a level of no more than 50%. The same
restriction applies when purchasing goods or services for the automobile (fuel,
repairs, maintenance etc.).
According to the Value Added Tax Act, an automobile is an M1-category vehicle with a tare weight of no more than 3500 kg and which in addition to the driver's seat has no more than eight seats.
exemptions remain, in which case 100% can be deducted from the input value
Five exemptions and two-year obligation of use
input value added tax can only be deducted 100% if the automobile is used
according to the conditions set out in the five exemptions over two years. If
the purpose of the automobile changes during the two-year period (which is not
considered in the case of automobiles purchased to sell) in such a way that it
no longer complies with the five exemptions, the taxable parson must reimburse
to the state 50% of the deducted input value added tax. Under such
circumstances interest is added to the input value added tax to be reimbursed,
which is calculated from the deduction of the input value added tax until
reimbursement to the state budget.
Also, the term ‘automobile self-supply’ will no longer be used in the Value Added Tax Act.
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