The President of the Republic of Estonia announced on 3 July 2014 amendments to the Value Added Tax Act of the country. The amendments of the Act will be implemented from 1 December 2014.
The amended Act establishes limits on deductible VAT on purchasing and using a car.
According to the amendments when buying a car or using the car on the basis of a lease agreement and buying fuel or making costs for repairing car the input value added tax will be deducted according to the proportion of using the car in business, but only 50% will be deducted, considering the proportion of taxable supply and supply exempt from tax. Conditions will be applied to get the deduction.
