{"id":6145,"date":"2019-03-11T15:31:21","date_gmt":"2019-03-11T15:31:21","guid":{"rendered":"https:\/\/www.mi.government.bg\/?page_id=6145"},"modified":"2026-03-02T15:18:52","modified_gmt":"2026-03-02T13:18:52","slug":"izpolzvane-na-slujebni-avtomobili","status":"publish","type":"page","link":"https:\/\/www.mi.government.bg\/en\/general\/izpolzvane-na-slujebni-avtomobili\/","title":{"rendered":"Use of company vehicles"},"content":{"rendered":"<p style=\"text-align: justify\"><span style=\"color: #29588e;font-size: xx-small\"><strong><em>Updated last 18.06.2025<\/em><\/strong><\/span><\/p>\n<p style=\"text-align: justify\"><span style=\"color: #29588e\"><strong>When does the right to deduct tax credit upon the purchase and use of company vehicles arise?<\/strong><\/span><\/p>\n<p style=\"text-align: justify\">Upon the purchase and use (maintenance, repair and consumables costs) of a company vehicle (which is\u00a0<strong>not a car<\/strong>\u00a0in the meaning of paragraph 1, item 18 of the Additional provisions of the Value Added Tax Act (VATA)) you may take advantage of the right to deduct tax credit as provided for in art. 69, para 1, item 1 of VATA. The vehicle should meet the following requirements in order not to be classified as a car:<\/p>\n<ul style=\"text-align: justify\">\n<li>To be intended for transport of cargo;<\/li>\n<li>To have <strong>permanently built-in technical equipment<\/strong> for the purpose of the main activity carried out.<\/li>\n<\/ul>\n<p style=\"text-align: justify\">The purchase and operating expenses for a<strong>\u00a0car\u00a0<\/strong>are subject to tax credit\u00a0<strong>only<\/strong>\u00a0when:<\/p>\n<ul style=\"text-align: justify\">\n<li>The car is only used for business (mainly for transport and guarding services, as a taxi, for rent, courier services or training of drivers of motor vehicles)<\/li>\n<li>The car was intended for re-sale.<\/li>\n<\/ul>\n<p style=\"text-align: justify\">\u00a0<\/p>\n<p style=\"text-align: justify\"><span style=\"color: #29588e\"><strong>How do you have to prove the use of the vehicle as part of the company\u2019s activities?<\/strong><\/span><\/p>\n<p style=\"text-align: justify\">In order to be recognised for tax purposes the accounting expense related to the operation of vehicles for business activities, documentary justification is required, proving that the mileage of the vehicle is entirely related to the independent economic activity of the company. The term \u201cdocumentary justification\u201d is provided for in art. 10 of Corporate Income Tax Act (CITA) and according to para 1 the accounting expense is recognised for tax purposes when justified by a primary accounting document within the meaning of the Accountancy Act, reflecting accurately the business transaction:<\/p>\n<ul style=\"text-align: justify\">\n<li>The primary document proving the purchase of fuel, consumables or services related to the maintenance of the vehicle is the<strong> invoice<\/strong>;<\/li>\n<li>There is no requirement as to the type and name of the document proving the mileage (most often this is the Journey form);<\/li>\n<li>In order to prove the use of the vehicle for professional and personal needs, the journey form should state the kilometres travelled and the route.<\/li>\n<\/ul>\n<p style=\"text-align: justify\">\u00a0<\/p>\n<p style=\"text-align: justify\"><span style=\"color: #29588e\"><strong>What is the procedure when the vehicle is used both for personal and for business purposes?<\/strong><\/span><\/p>\n<p style=\"text-align: justify\">The expenses related to the use of the vehicle for personal needs are treated as\u00a0<strong>expenses in kind<\/strong>\u00a0and are subject to expense tax (better known as\u00a0<strong>\u201cWeekend tax\u201c<\/strong>), as stated in art. 204, para 1, item \u00a04 of CITA. In this case art. 215a, para 2 defines three ways to be determined the expense in kind tax base:<\/p>\n<ul style=\"text-align: justify\">\n<li>By multiplying the total amount of all expenses related to the vehicle by the <strong>ratio between the kilometres travelled for personal needs and the total travelled kilometres<\/strong> by the respective vehicle;<\/li>\n<li>By multiplying the total amount of all expenses related to the vehicle by the <strong>ratio between the hours of personal use of the vehicle<\/strong> and the total hours of use of the vehicle<\/li>\n<li>By multiplying the total amount of all expenses related to the vehicle by <strong>50 percent<\/strong>.<\/li>\n<\/ul>\n<p style=\"text-align: justify\">Each company by its sole discretion choose one of the three methods for calculation of the tax base to determine the expenses in kind tax. With regard to the right to a tax credit, you should keep in mind that even when buying a car that is entitled to a tax credit, it is known that the same will be used also for personal purposes, the company should use incomplete tax credit, but proportional, depending on the expected use of the car (Art. 71a and 71b of the VAT Act). Since 2024, the proportion must be mandatorily declared in Annex No. 11 to the purchases ledger, and in case of a change in the actual ratio, an adjustment is made pursuant to Article 73b of the Value Added Tax Act (VATA).<\/p>\n<hr \/>\n<table style=\"width: 100%;border: 2px solid #afabab;height: 34px\" border=\"2\" cellpadding=\"8\">\n<tbody>\n<tr style=\"height: 24px\">\n<td style=\"background-color: #4f81bd;border: 1px solid #4f81bd;height: 24px\" colspan=\"2\"><em><strong><span style=\"color: #ffffff\">Important to know<\/span><\/strong><\/em><\/td>\n<\/tr>\n<tr style=\"height: 10px\">\n<td style=\"background-color: #ffffff;border: 1px solid #ffffff;width: 60px;height: 10px\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"\u0412\u0430\u0436\u043d\u043e \u0435 \u0434\u0430 \u0437\u043d\u0430\u0435\u0442\u0435\" src=\"https:\/\/www.mi.government.bg\/files\/useruploads\/images\/msp\/attention_-_important_to_know.jpg\" alt=\"\u0412\u0430\u0436\u043d\u043e \u0435 \u0434\u0430 \u0437\u043d\u0430\u0435\u0442\u0435\" width=\"50\" height=\"50\" \/><\/td>\n<td style=\"background-color: #ffffff;border: 1px solid #ffffff;height: 10px\">\n<p style=\"text-align: justify\">With respect to the taxation of expenses in kind your company has the right to choose between two options listed below:<\/p>\n<ul>\n<li style=\"text-align: justify\">To treat the calculated base of the expenses in kind as<strong> income in kind of the natural persons<\/strong> who have used the vehicle for personal needs (and this income is subject to taxation as provided for in the Personal Income Tax Act) or;<\/li>\n<li style=\"text-align: justify\">To tax the expenses in kind under the provisions of CITA (tax at a rate of 10% of the calculated tax base of expenses in kind).<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<hr \/>\n<table style=\"width: 100%;border: 2px solid #afabab;height: 34px\" border=\"2\" cellpadding=\"8\">\n<tbody>\n<tr style=\"height: 24px\">\n<td style=\"background-color: #4f81bd;border: 1px solid #4f81bd;height: 24px;text-align: justify\" colspan=\"2\"><em><strong><span style=\"color: #ffffff\">Important to know<\/span><\/strong><\/em><\/td>\n<\/tr>\n<tr style=\"height: 10px\">\n<td style=\"background-color: #ffffff;border: 1px solid #ffffff;width: 60px;height: 10px;text-align: justify\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"\u0412\u0430\u0436\u043d\u043e \u0435 \u0434\u0430 \u0437\u043d\u0430\u0435\u0442\u0435\" src=\"https:\/\/www.mi.government.bg\/files\/useruploads\/images\/msp\/attention_-_important_to_know.jpg\" alt=\"\u0412\u0430\u0436\u043d\u043e \u0435 \u0434\u0430 \u0437\u043d\u0430\u0435\u0442\u0435\" width=\"50\" height=\"50\" \/><\/td>\n<td style=\"background-color: #ffffff;border: 1px solid #ffffff;height: 10px;text-align: justify\">\n<p>The choice with respect to the taxation on the expenses in kind (Tax on expences) is declared in the annual tax return, which is filed for the previous year. When the return is drawn up, there is a choice for the period the return relates to &#8211; for the new established companies only.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<hr \/>\n<p style=\"text-align: justify\">\u00a0<\/p>\n<p style=\"text-align: justify\"><span style=\"color: #29588e\"><strong>Which expenses on company vehicles are included in the tax base of the tax on the expenses?<\/strong><\/span><\/p>\n<p style=\"text-align: justify\">When determining the tax base of the tax on the expenses in kind (according to art. 215\u0430, para 1 of CITA) all accounting expenses related to the vehicle are included in the total expenses:<\/p>\n<ul style=\"text-align: justify\">\n<li>Operating expenses;<\/li>\n<li>Insurance expenses;<\/li>\n<li>Local taxes;<\/li>\n<li>Vignette fees;<\/li>\n<li>Rents (if the vehicles is rented);<\/li>\n<li>Parking expenses;<\/li>\n<li>VAT reported as an expense;<\/li>\n<li>Salary of the driver (if any), including the social security and health insurance contributions which are at the expense of the employer.<\/li>\n<\/ul>\n<hr \/>\n<table style=\"width: 100%;border: 2px solid #afabab;height: 34px\" border=\"2\" cellpadding=\"8\">\n<tbody>\n<tr style=\"height: 24px\">\n<td style=\"background-color: #4f81bd;border: 1px solid #4f81bd;height: 24px\" colspan=\"2\"><em><strong><span style=\"color: #ffffff\">Important to know<\/span><\/strong><\/em><\/td>\n<\/tr>\n<tr style=\"height: 10px\">\n<td style=\"background-color: #ffffff;border: 1px solid #ffffff;width: 60px;height: 10px\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"\u0412\u0430\u0436\u043d\u043e \u0435 \u0434\u0430 \u0437\u043d\u0430\u0435\u0442\u0435\" src=\"https:\/\/www.mi.government.bg\/files\/useruploads\/images\/msp\/attention_-_important_to_know.jpg\" alt=\"\u0412\u0430\u0436\u043d\u043e \u0435 \u0434\u0430 \u0437\u043d\u0430\u0435\u0442\u0435\" width=\"50\" height=\"50\" \/><\/td>\n<td style=\"background-color: #ffffff;border: 1px solid #ffffff;height: 10px\">\n<p style=\"text-align: justify\">Since the vehicle is a depreciable asset for tax purposes, it should be taken into account that on the grounds of \u00a7 1, item \u00a083 of the Additional provisions of CITA, the tax base for determining the tax on the expenses under art. 204, para 1, item 4 of the same act the depreciation of the asset\u00a0<strong>for tax purposes (not for accounting purposes)\u00a0<\/strong>should be taken into account.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<hr \/>\n<table style=\"width: 100%;border: 2px solid #afabab;height: 80px\" border=\"2\" cellpadding=\"8\">\n<tbody>\n<tr style=\"height: 24px\">\n<td style=\"background-color: #4f81bd;border: 1px solid #4f81bd;height: 24px\" colspan=\"2\"><span style=\"color: #ffffff\"><strong><em>For more information<\/em><\/strong><\/span><\/td>\n<\/tr>\n<tr style=\"height: 56px\">\n<td style=\"background-color: #ffffff;border: 1px solid #ffffff;width: 60px;height: 56px\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"For more information\" src=\"https:\/\/www.mi.government.bg\/files\/useruploads\/images\/msp\/computer_-_more_information.png\" alt=\"For more information\" width=\"50\" height=\"53\" \/><\/td>\n<td style=\"background-color: #ffffff;border: 1px solid #ffffff;height: 56px\">\n<p style=\"text-align: justify\">Additional information and answers to the most frequently asked questions related to the Weekend tax (actions that the tax liable person (TLP) should undertake upon the acquisition of a non-current asset used both for the business of the company and for personal needs) are available on the publication of the\u00a0<a href=\"https:\/\/nra.bg\/wps\/portal\/nra\/taxes\/danak-varhu-razhodite\" target=\"_blank\" rel=\"noopener\">National Revenue Agency<\/a>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"O0\" style=\"text-align: justify\">\n<hr \/>\n<p style=\"text-align: justify\">\u00a0<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Updated last 18.06.2025 When does the right to deduct tax credit upon the purchase and use of company vehicles arise? Upon the purchase and use (maintenance, repair and consumables costs) of a company vehicle (which is\u00a0not a car\u00a0in the meaning of paragraph 1, item 18 of the Additional provisions of the Value Added Tax Act [&hellip;]<\/p>\n","protected":false},"author":150,"featured_media":0,"parent":6419,"menu_order":1000,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"tags":[],"class_list":["post-6145","page","type-page","status-publish","hentry"],"lang":"en","translations":{"en":6145,"bg":6144},"pll_sync_post":[],"_links":{"self":[{"href":"https:\/\/www.mi.government.bg\/rest\/wp\/v2\/pages\/6145","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mi.government.bg\/rest\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.mi.government.bg\/rest\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.mi.government.bg\/rest\/wp\/v2\/users\/150"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mi.government.bg\/rest\/wp\/v2\/comments?post=6145"}],"version-history":[{"count":0,"href":"https:\/\/www.mi.government.bg\/rest\/wp\/v2\/pages\/6145\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/www.mi.government.bg\/rest\/wp\/v2\/pages\/6419"}],"wp:attachment":[{"href":"https:\/\/www.mi.government.bg\/rest\/wp\/v2\/media?parent=6145"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mi.government.bg\/rest\/wp\/v2\/tags?post=6145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}