Increasingly, we receive cases with requests from the tax authorities for adjustments to the tax credit and for charging tax on expenses when using company cars. The reason for this is the claim that the cars are actually used for personal purposes and not for the independent economic activity of these companies.
How do tax authorities establish this? The revenue authorities carry out checks where they establish from the data of the toll cameras of the RIA that the vehicle is detected in a place other than the one indicated in the road book for a particular day. They conclude that the vehicle was used for personal purposes and not for the company’s business. The consequence was that notices under Article 103 of the Tax and Social Securities Procedural Act were sent to the tax authorities to correct the tax return in respect of the right to deduct tax credit for the expenditure incurred on fuel, etc. in respect of that car and to charge tax on the expenditure.
There are many questions that are raised about this approach and we try to resolve them on a case by case basis. Still it is important to remind everyone that careful consideration should be given to what is reflected on the road book such as route, mileage, day, etc. etc.
The article above is for information purposes only. It is not a (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.
