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Amendment of VAT Regulations on category of motor vehicles on which the VAT deduction is allowed

Tax Alert, April 2014

Regulations amending VAT Regulations came into force on 20 March 2014 and amended stipulations on category of motor vehicles, intended for leisure and personal transportation, upon acquisition of which the VAT is deductible.

We compared amended stipulations in the following table:

Category of motor vehicles for which deduction was allowed until 20 March 2014

Category of motor vehicles for which deduction was allowed until 20 March 2014

Motor vehicles of N1category classified under tariff code 8703 of the Customs Tariff

  • which under special regulations include motor vehicles intended for transportation of goods and whose maximum weight does not exceed 3.5 tonnes

Motor vehicles of N1 category classified under tariff code 8703 of the Customs Tariff

  • which are not subject to special tax on motor vehicles under the Act on Special Tax on Motor Vehicles


The provision restricting the right to deduct input VAT was also amended accordingly. In particular, if motor vehicle of N1 category is converted into a motor vehicle that is subject to special tax on motor vehicles, taxable person no longer has a right to deduct input VAT on all incoming deliveries closely related to the use of the respective vehicle. Additionally, taxable person has to adjust input VAT it deducted upon purchase of the converted vehicle.
Further to the above, it can be concluded that previous conditions for the deduction of input VAT (maximum weight and purpose of the vehicle) were replaced with a new one – the purchased vehicle may not be subject to special tax on motor vehicles.


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