Tax - Acknowledged Costs and Tax Deduction for Buying a Vehicle through Reforms

Some as soon as they start a business, some after a while, but certainly all entrepreneurs think about it: buy or rent a car to save on VAT and profit tax. A car purchased for personal use does not come with any tax benefits. Things change when entrepreneurs buys a vehicle for use in the company's business. The law has predicted that there will always be abuses, and depending on the current government and ministers, they are implementing reforms aimed at preventing the abuse of authority when purchasing expensive cars. From the 01st of January 2018, craftsmen and selfemployed workers have a reason more to start new jobs or increase the fleet of existing vehicles by purchasing new vehicles. With the entry into force of the Amendments to the Value Added Tax (VAT) Act, owners of new vehicles in the status of a legal entity are exempt from paying prepayment for the purchase, maintenance and servicing of vehicles as well as a wide range of other tax-acknowledged costs in the amount of 50% of the total cost. In continuation of our work, our aim is to find out what is more profitable to firms: financial or operational leasing, what with tax-acknowledged costs and deduction of prepayment through reforms to date and comparative view of costs and taxes through tax reform years.