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Slovakia: Input VAT deduction limited to 50% on purchase of motor vehicles and motorcycles

Limitation effective from July 1, 2025, until June 30, 2028

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April 2, 2025

Beginning July 1, 2025, businesses will only be entitled to a 50% input value added tax (VAT) deduction on the purchase of passenger vehicles, fuel, repair, and maintenance services—increasing the cost of acquisition and operation of passenger cars by more than 10%.

Summary

Slovakia applied for permission to derogate from the VAT Directive to limit the input VAT deduction on motor vehicles and motorcycles used for both private and business purposes due to the complexity and administrative burden of the current system. The European Commission (EC) published a proposal for a Council Implementing Decision that authorizes Slovakia to limit the right for input VAT deduction on motor vehicles and motorcycles to 50%, beginning July 1, 2025, excluding those used for resale, rental, passenger transport, driving lessons, testing, or as replacements.

The limitation is effective until June 30, 2028, with the possibility of extension.

Read an April 2025 report prepared by the KPMG member firm in Slovakia

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