Individual business Deduction of expenses related to the use of vehicles by a
Verified 07 March 2024 - Directorate for Legal and Administrative Information (Prime Minister)
Expenditure relating to the purchase or use of a vehicle for the purposes of the professional activity of the head of company may be deducted from the company's tax result. Examples are travel costs or mileage for commuting.
A deduction is a tax transaction intended to reduce taxable income of a certain amount.
Individual business For a person to deduct expenses means to withdraw the total amount of expenses deductible from his tax result. In this way, the basis on which it will be taxed will be reduced and so will its tax.
Deductible expenses are:
- Travel Expenses and journey for the purposes of the professional activity. For example, traveling to customers or suppliers.
- Income from a carpooling activity for business trips. Only the net amounts of the refunds paid by the carpoolers are deductible.
- Rent fraction a vehicle for hire or leasing
- Amortization, insurance, interest on loans, reparation company-owned vehicles
- Travel costs between home and workplace. Travel expenses for the first 40 kilometers between home and work are still deductible. Beyond the first 40 kilometers, these are not deductible expenses unless this distance is independent of the professional's wishes.
Example :
Remoteness beyond 40 kilometers from home to work is justified where it is the consequence of a transfer following promotion. It may be caused by the company’s move. Living near a special education center that takes care of a child with a disability is also justified. In these situations, travel expenses are deductible.
Expenses related to vehicles are automatically deductible for actual amount. It's called deduction at actual costs. In this case, the company shall indicate the amount of expenditure in the expenses in its profit and loss account.
If it meets certain conditions, the company may opting for a flat-rate scale to deduct expenses related to vehicles. It's either the kilometric or the fuel. The applicable scale is different when the company earns industrial and commercial profits (BIC) or non-commercial profits (NTB).
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Industrial and Commercial Profits (BIC)
The individual entrepreneur who makes industrial and commercial profits (BIC) and who has opted for a super-simplified accounting, may apply the fuel rate for expenditure on business travel.
Fiscal power of passenger vehicles | Gas oil | Super Lead Free | LPG |
|---|---|---|---|
3 to 4 horsepower (CV) | €0.099 | €0.123 | €0.073 |
5-7 HP | €0.122 | €0.152 | €0.090 |
8 and 9 HP | €0.145 | €0.181 | €0.107 |
10 and 11 HP | €0.164 | €0.203 | €0.121 |
12 HP or more | €0.182 | €0.226 | €0.135 |
Fiscal power of two-wheeled motor vehicles | Fuel costs per kilometer |
|---|---|
Less than 50 cm3 | €0.040 |
50 cm3 125 cm3 | €0.081 |
3, 4 and 5 HP | €0.102 |
Above 5 CV | €0.146 |
Non-Commercial Profits (NTB)
Depending on the type of expenditure, the company may choose to apply either the kilometric or fuel scale. The scale applies only to leased or rented vehicles.
1. Mileage scale
The sole trader earning non-commercial profits (NBC) may opt for the kilometric scale for his expenses of car and motorized 2-wheelers for the kilometers traveled during the professional activity.
The vehicles concerned are the personal vehicles of the individual contractor or vehicles hired (for more than 3 months) or leasing. All types of vehicles are concerned, including electric vehicles.
Warning
Where the mileage scale is applied to expenditure relating to vehicles rented or leased, it is not possible to deduct rents as well.
On the other hand, for vehicles specially designed for the professional activity (tractor, taxi, etc.), the expenses must be deducted for their actual amount. Thus the option for the kilometric scale is not possible.
The company wishing to opt for the kilometer scale must do so before 1er January. This option is considered to be taken when the company does not record vehicle expenses as expenses in its income statement. If the company wishes to waive the option and deduct its expenses for the actual amount, it is sufficient to enter them as an expense in its income statement.
The option applies for the whole year and on all vehicles used on a professional basis. In the event of a change of vehicle during the year, the costs relating to it shall also be subject to the mileage scale.
If more than one vehicle is used, the scale shall be applied separately on each vehicle.
Distance traveled | |||
|---|---|---|---|
Fiscal Power | Up to 5,000 km | From 5,001 to 20,000 km | Beyond 20,000 km |
3 HP or less | d x 0.529 | (d x 0.316) + 1065 | d x 0.370 |
4 HP | d x 0.606 | (d x 0.340) + 1330 | d x 0.407 |
5 HP | d x 0.636 | (d x 0.357) + 1,395 | d x 0.427 |
6 HP | d x 0.665 | (d x 0.374) + 1457 | d x 0.447 |
7 HP or more | d x 0.697 | (d x 0.394) + 1515 | d x 0.470 |
Moped and scooter | Up to 3,000 km | From 3,001 to 6,000 km | Over 6,000 km |
|---|---|---|---|
Motorcycle | Up to 3,000 km | From 3,001 to 6,000 km | Over 6,000 km |
P<50 cm3 | d x 0.315 | (d x 0.079) + 711 | d x 0.198 |
1 or 2 HP | d x 0.395 | (d x 0.099) + 891 | d x 0.248 |
3, 4 or 5 HP | d x 0.468 | (d x 0.082) + 1,158 | d x 0.275 |
More than 5 CV | d x 0.606 | (d x 0.079) + 1,583 | d x 0.343 |
Where the vehicle is electric, the amount of the deduction shall be increased by 20%.
Example :
An entrepreneur travels 6,750 km for the needs of his professional life in 2023 with his personal vehicle with a fiscal power equal to 5CV. If he has opted for the kilometric scale, he can deduct from his result the following amount: (6 750 x 0,357) + 1395 = €3,804.75.
The kilometric scale covers the following expenditure:
- Vehicle depreciation
- Expenditure on equipment and accessories
- Current expenditure on maintenance and repair
- Tire Expenses
- Fuel costs (diesel, electricity...)
- Insurance premiums
Expenses related to vehicles that are not covered by the mileage scale may be deducted from the tax result for their actual amount in proportion to the professional use of the vehicle. Examples include:
- Garage costs
- Toll charges
- Accident expenses
2. Fuel Schedule
A company earning non-commercial profits (NBC) may opt for expenses relating to the professional use of leased or rented vehicles are deducted on the basis of fuel rate.
Fiscal power of passenger vehicles | Gas oil | Super Lead Free | LPG |
|---|---|---|---|
3 to 4 horsepower (CV) | €0.099 | €0.123 | €0.073 |
5-7 HP | €0.122 | €0.152 | €0.090 |
8 and 9 HP | €0.145 | €0.181 | €0.107 |
10 and 11 HP | €0.164 | €0.203 | €0.121 |
12 HP or more | €0.182 | €0.226 | €0.135 |
Fiscal power of two-wheeled motor vehicles | Fuel costs per kilometer |
|---|---|
Less than 50 cm3 | €0.040 |
50 cm3 125 cm3 | €0.081 |
3, 4 and 5 HP | €0.102 |
Above 5 CV | €0.142 |
Industrial and Commercial Profits (BIC)
Non-Commercial Profits (NTB)
Super Simplified Accounting
Ministry of Finance