VAT on Personal Cars from 1.1.2026 in Slovakia: 50% vs 100% Deduction + Notification + Records

Note: This article is informational. For disputed situations (especially atypical leases, short-term rentals and usage combinations), we recommend verifying your specific case with a tax advisor or accountant.

What Changes from 1.1.2026 in One Sentence

If you use a personal car (and selected motorcycles) also privately, the state will "take" half of your VAT deduction – flat 50% (and likewise for fuel, service, parts, washing, tires, etc.). If you want 100%, you must prove exclusive business use and meet new formal conditions, including notification to the tax office.

These rules are based on the transitional provision § 85n of the VAT Act (Act No. 222/2004 Coll.) and follow the EU derogation – Council Implementing Decision (EU) 2025/852, which allows limiting deduction to 50% and not charging VAT on private use in this regime until 30.6.2028.

1) DECISION TREE (100% vs 50% in 60 Seconds)

Below is a "quick tree": answer honestly 5 questions and you'll know where you stand.

Step 1: Does § 85n apply to your vehicle?

The change targets mainly M1 category (typical personal cars) and selected motorcycles L1e and L3e.

✅ Yes → continue. | ❓ No / uncertain → beware, regular deduction rules may apply (§ 49 et seq.), not the flat rate.

Step 2: How do you use the vehicle? (key node)

A) Mixed use

(business + private / other non-business) → 50% VAT deduction

B) Exclusive business use

(real, provable, no private trips) → you can go for 100%, but beware of conditions

Step 3: Purchase vs lease vs rental

Acquisition type	Mixed use	Exclusive business use
Purchase / acquisition	50% of VAT on acquisition	100% (either exception or records)
Operating lease / long-term rental	50% of VAT from each installment	100% (with conditions) + notification "at first deduction"
Short-term rental (≤ 30 days, rent-a-car)	General rules (§ 85n para. 2 does not apply)*	100% only with proof of exclusivity

* For short-term rentals (up to 30 days), § 85n para. 2 does not apply – deduction is assessed under general VAT Act rules, not as automatic 50% from rental.

Step 4: Exceptions – when can you have 100% without a logbook?

§ 85n para. 4 provides a list of situations where 50% does not apply:

Rental / leasing as a business activity (car rental company)
Transportation of persons and luggage for consideration including taxi
Driving school (training vehicle)
Demonstration / test vehicle
Replacement vehicle provided to customer during repair

Step 5: If you want 100% the "regular" way

If you're not going through the exception in para. 4, the regime of para. 5 remains: the vehicle must be exclusively for business, you must keep detailed electronic records per para. 6, and you must file a notification.

2) 50% VAT Deduction: What Falls Under the Flat Rate

50% on purchase (acquisition) during 1.1.2026 – 30.6.2028

If you acquire a personal motor vehicle as a long-term asset and it's not exclusively per para. 4 or para. 5, you deduct only 50% VAT.

Important "plus": In this 50% regime, using the car for purposes other than business is not considered a supply of services for consideration (i.e., you don't have to "self-tax" private trips).

50% on operating lease / long-term rental

If you use the car under a contract other than short-term, and it's not exclusive, you deduct 50% VAT from the rental service.

50% also on expenses: fuel, service, parts, tires, parking…

Warning: Many entrepreneurs get caught here – the 50% flat rate also applies to goods and services "around the car", if the car is also used for non-business purposes.

§ 85n para. 3 states that for services and goods received in connection with the vehicle, you deduct tax at 50%. In practice, this typically includes:

• Fuel (gasoline/diesel, or charging)
• Service, repairs, maintenance
• Spare parts, tires
• Washing, detailing
• Parking, tolls, highway fees

3) 100% VAT Deduction: Two Paths (Exception vs Records)

100% without logbook: "exhaustive" use per § 85n para. 4

If your business is where the personal car is the subject of the activity in a specific regime (car rental, taxi, driving school, demo/test, replacement car in service), the 50% regime doesn't apply and you can go for 100%.

Caution: This doesn't mean "without evidence." You still must be able to prove the vehicle is really used only this way (e.g., rental contracts, ride orders, service protocols for replacement cars).

100% with records: "regular" exclusive business use per § 85n para. 5 + para. 6

If you use the car exclusively for business outside the exhaustive exceptions, the law allows 100%, but only if:

• The vehicle is exclusively for business
• You keep detailed records in electronic form, separately for each vehicle
• You can provide records electronically upon request from the tax office

4) § 85n and the Time Period 1.1.2026 – 30.6.2028

The EU exception (derogation) allows Slovakia to limit VAT deduction to 50% for vehicles not used exclusively for business, while simplifying the regime by not charging VAT on private use in the 50% regime.

EU Decision 2025/852 permits the measure for the period from July 1, 2025 to June 30, 2028. Slovakia applies it in the law from January 1, 2026.

Extension: If Slovakia wants to extend this measure beyond 30.6.2028, it must submit a request to the European Commission by September 30, 2027.

5) NOTIFICATION to Tax Office: Who, When, and What to Watch

When does notification obligation arise?

If you use a personal motor vehicle exclusively for business per § 85n para. 4 (exhaustive cases) or § 85n para. 5 (regular exclusive use with records), you are required to notify the tax office of this fact.

Deadline: "by the return deadline"

• Notification is filed within the VAT return deadline for the period in which you claimed the deduction
• For operating leases, notify in the deadline for the period when you claimed the deduction for the first time

Form

Notification is filed on the form "Notification of use of personal motor vehicle for business", the template of which is determined and published by the Financial Directorate.

Most important "relief": cars acquired by 31.12.2025

If you acquired the car by December 31, 2025, the notification obligation per § 85n para. 9 does not apply. Entrepreneurs with existing car fleets don't need to "mass notify" just because of the rule change from 1.1.2026.

6) NOTIFICATION CHECKLIST (to make it "pass")

A) What's Critical (top risks during audit)

Chosen regime matches reality

If there's even occasional private use, 100% is risky.

You have evidence prepared for notification

For para. 5: electronic records. For para. 4: evidence of use character.

You file notification in correct deadline

Return deadline for the period when you claimed deduction; for long-term rental the first time.

You correctly identify the vehicle

Minimum: VIN, registration number, type/name.

B) Deadlines by situation

• On purchase: by VAT return deadline for the period when you first claim deduction from acquisition
• On operating lease (rental > 30 days): by VAT return deadline for the first deduction period
• On change between para. 4 ↔ para. 5: by VAT return deadline for the period when change occurred
• On switch from 50% (para. 1) to exclusive from next year: by December 31 of the respective year

C) Notification form

Notification is filed on a prescribed form "Notification of use of personal motor vehicle for business", the template of which is determined and published by the Financial Directorate of the Slovak Republic.

Warning: In 100% regime with later switch to mixed use, the topic of self-taxation of private use returns under general rules (§ 9 para. 2).

7) RECORDS TEMPLATE + Minimum Scope (100% Regime)

Minimum scope of records per § 85n para. 6

Records are kept electronically, separately for each vehicle, and contain:

A) Vehicle identification

• VIN
• Registration number + vehicle name and type

B) Kilometer status

• Odometer reading on the day records start
• At the end of each tax period
• On the day records end

C) Records of each trip

• Sequential record number
• Driver's name and surname
• Date, start and end time
• Purpose of trip demonstrating business use
• Start and end location
• Kilometers per trip, odometer before/after trip

D) Operating cost records

• Broken down by individual goods and services
• Specification, acquisition price excl. VAT, date of acquisition/receipt

Practical tip: For "trip purpose" don't just write "meeting." Include at least: client/partner, subject, possibly order/project. During audits, the "purpose" often breaks.

Archiving: Record retention is tied to § 70 para. 11 letter b) – in practice, expect a 10-year retention horizon.

8) 10 PRACTICAL EXAMPLES

Example 1: Director uses company car also privately

Solution: 50% deduction on car (if acquired in the period) and also on fuel/service, because it's mixed use.

Example 2: Car on operating lease, also used privately

Solution: 50% of VAT from rental payments + 50% also on fuel, service, tires.

Example 3: Operating lease, strictly business only

Solution: 100% is possible – notify per § 85n para. 5, for rental notify in the first deduction period, keep electronic records.

Example 4: Replacement vehicle in auto service

Solution: Falls under exhaustive exception (§ 85n para. 4) → 100% without logbook requirement. Note: Notification is still required.

Example 5: Taxi service

Solution: Exception (§ 85n para. 4) → 100%. Note: don't forget notification.

Example 6: Demo / test car (car dealership)

Solution: Exception (§ 85n para. 4) → 100%. Have internal rules, records of lending to clients.

Example 7: Fuel, parking, highway sticker (car used also privately)

Solution: § 85n para. 3 → 50% VAT deduction. Applies even if car was purchased before 1.1.2026.

Example 8: Service and maintenance (car used also privately)

Solution: 50% deduction per § 85n para. 3. In 50% regime you don't need to prove business ratio.

Example 9: Car purchased in 2024, from 1.1.2026 used also privately

Solution: 50% doesn't apply retroactively to the car itself, but for expenses from 1.1.2026 with mixed use, 50% applies. You don't need to notify exclusive use because the car was acquired by 31.12.2025.

Warning: If you claimed 100% deduction when purchasing in 2024 and now it's mixed use, obligation to self-tax private use arises under § 9 para. 2 (general rules).

Example 10: I want to switch from 50% to 100% (from next calendar year)

Solution: Per § 85n para. 10 letter b) – if you have a car in 50% regime (para. 1) and want to start using it exclusively per para. 4/5 from the following calendar year, notify by December 31. For para. 5, start keeping electronic records from January 1 of that year.

Conclusion: Recommended Strategy for Entrepreneurs

Admit your usage reality. If the car is "also for private," 50% is the safe default.

If you want 100%, prepare for the process: internal directive + electronic records + discipline + notification.

Don't forget that 50% also applies to "car operation" – and that can make a big difference in cash flow.

For operating leases, watch the "first deduction" – notification is tied to first claim.

Sources

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VAT on Personal Cars from 1.1.2026: 50% vs 100% Deduction + Notification + Records (Practical Guide)