Few freelancers have a car only for work. You drive clients during the week and the family at weekends. The question is: what happens to the tax when the car is mixed-use? And there’s more here than “I put in a percentage” - the law separates situations that look identical.
Four situations that don’t get mixed up
- Allocating the purchase to the activity (that’s the first VAT calculation).
- Using the car in operations with and without a deduction right.
- Taking personal trips in a car whose VAT you already deducted.
- Withdrawing the car from the activity for good.
Each has its own rule. Mixing them up is where most mistakes start.
Personal use of a car whose VAT you deducted
Here’s what a lot of people don’t know: if you deducted the car’s VAT and then use it for your personal life, the AT treats that private use as a taxable operation - it isn’t simply “I deduct one percentage less” (art. 4(2)(a) of the CIVA; the AT’s position in Ofício-Circulado 25088/2025).
And the split rests on actual mileage, not a round number. You can’t multiply the purchase VAT by a made-up personal-use percentage each quarter. For that you need a proper record: dates, route, kilometres, purpose, link to the client, odometer readings.
Operations with and without a deduction right: the pro rata
If, beyond personal use, you have an activity that gives a deduction right and one that doesn’t (an exempt activity, say), the pro rata or actual-allocation of art. 23 of the CIVA comes in. It’s a tax method with its own rules - not the same thing as the car’s use percentage, and not something you replace with a number by hand.
On IRS: three numbers that get confused
Three IRS rules tend to get confused:
So: the “15%” on the personal car’s repairs (art. 78-F) is not the “15%” of the simplified regime’s expense justification. And the same invoice can’t be both 100% business and 100% personal at once - if the use is mixed, you split it.
”Paying myself mileage”?
Tempting, but no. Someone with category-B income cannot apply to themselves the rules on compensation for using your own car as if they were an employee. Art. 33(1) of the CIRS limits that kind of payment to the income holder themselves.
The file that saves you
If the car is mixed-use, what protects you in an inspection is the evidence. Keep a usage record with dates, kilometres, destination, business purpose and the link to each job. It’s not a template imposed by law - it’s the structure that backs up the split you declared.
Where FIZ comes in
FIZ helps you keep costs organised and apply the right percentages, without turning a personal-use percentage into a shortcut the AT won’t accept. Whatever needs splitting is flagged for you to handle with your accountant.
In summary
- Personal use of a car whose VAT you deducted = a taxable operation, split by actual mileage - not “I deduct X% less”.
- Pro rata (art. 23) is for operations with and without a deduction right, its own method - different from the car’s use percentage.
- Mind the numbers: 25% (partial expense, art. 31(14)), 15% of the VAT on personal repairs (art. 78-F) and 15% of the justification (art. 31(13)) are three different things. And you don’t “pay yourself mileage”.
Next piece: the car on IRS.
