Fuel, the black gold that has never been as good as it is today. It’s a real fortune that escapes every month from the already empty pockets of individuals, so when we talk about companies that have to manage a fleet of professional vehicles, there can be enough to cause discomfort. And not to curse every pass at the pump, there is still good news: the VAT on fuel is sometimes recoverable … sometimes only.
Companies are required to follow strict rules on the recovery of VAT on their fuel purchases.
Here is a fact sheet on the rules applicable to the recovery of VAT on fuel bills.
The different categories of vehicles
In order to study VAT on fuel, it is first necessary to distinguish between commercial vehicles and passenger vehicles.
A passenger vehicle is intended to transport people. The mention “VP” is normally shown on the registration card for this type of vehicle.
A commercial vehicle is intended to carry goods and/or equipment, such as trucks and vans. The word “VU” is normally shown on the registration card for this type of vehicle.
- Depending on the vehicle
- On diesel
- On the LPG
- On gasoline
- What do we do?
Depending on the vehicle
Before seeing which types of fuels may qualify for VAT recovery, it is necessary to distinguish the category of the vehicle concerned. Between passenger vehicle and commercial vehicle, the differences can be fundamental. Hence the interest of thinking well upstream his purchase. The passenger vehicle is the one used to transport people. Comprising of five to eight seats, it is the car of “mister everyone”. To check this category, the mention “VP” (private vehicle) is marked on the registration certificate. The purpose of the commercial vehicle is to transport goods, tools, equipment … It is the word “VU” which appears on the registration card.
For diesel vehicles, VAT can be recovered to a certain extent. If it is a commercial vehicle, it will be taken into account in full. On the other hand, if the vehicle concerned is a VP, then the VAT on fuel can only be recovered up to 80%.
On the LPG
LPG (liquefied petroleum gas) is clearly the star of the recoverable VAT. It will be possible to count it to 100%, whether it is a passenger vehicle or a commercial vehicle. This benefit also applies to liquefied propane, liquefied butane or GVN (compressed natural gas). However, if it is gaseous LPG, the VAT will be recoverable only up to 50% for VP (but always 100% for VU).
You have chosen gasoline-powered vehicles for your business. So do a cross on any VAT and fuel tax recovery. Whether it is a VU or a VP, you will be fully responsible for your costs.
What do we do?
When the VAT on fuel is not recoverable, the amount of VAT included in the consumption must be charged as an expense. Same for the remainder when the VAT cannot be recovered at 100%.