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Is VAT applicable in the case of salary conversion?

Yes. Vehicle use within the framework of salary sacrifice is subject to VAT. The basis is the monetary benefit (fringe benefit) of the employees. 19% VAT is calculated on this amount. 

Important: Tax incentives (e.g., for electric or hybrid vehicles) do not apply to VAT.

Regarding the rate: For companies entitled to input tax deduction, the vehicle rate is generally incurred as a net rate (input tax is recovered). For companies not entitled to input tax deduction, the gross rate becomes relevant.

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