You’ve bought the car and you know what you deduct (purchase and running costs). But the car’s tax life doesn’t end there: there’s the return, the sale one day, and the documents to keep. It’s the part almost nobody plans - and where the surprises are.
Where the car’s VAT goes on the return
Deducting isn’t filling in just any field:
And a costly misunderstanding: deducting is not receiving a transfer from the state. The deduction first enters the period’s calculation; the balance can carry over to the next period or be claimed as a refund if you meet the conditions (art. 22 of the CIVA).
The right period: when you receive the invoice, not the bank date
The moment you have the right to deduct arises from the right and the invoice received, not from the date the car left your account. The base rule is the period in which you receive the invoice; the period it was issued only counts under the condition in art. 22(3) - which matters when the invoice is issued and received in different periods. Creating the entry in the app or the card debit does not set the period on its own, and a dealer’s quote is not yet input VAT (art. 22(1)-(3)).
Discounts and credit notes
If after the purchase you get a discount or a credit note, you have to link it to the original purchase and revise the deduction you made (art. 78 of the CIVA). Take special care if the discount brings you down around the €62,500 limit: moving the value near the door may force a recalculation of the deduction - it isn’t a simple “negative expense”.
Selling or withdrawing the car from the activity
Here are the biggest surprises:
- Selling a car whose VAT you deducted can generate VAT on the sale. The fact that depreciation has already ended does not make the sale exempt on its own - check the basis and the applicable exemption (art. 3 and art. 9 of the CIVA).
- Moving the car into your personal sphere for good, having deducted the VAT, is handled separately (art. 3(3) of the CIVA).
- The famous “5-year VAT refund” is neither automatic nor unconditional: art. 24 has conditions, limits and exceptions (including n.º 7 for certain assets). Check whether it applies to your car before counting on adjustments.
- On IRS, selling or withdrawing the car can mean a capital-gains (mais-valias) calculation on the asset - another, separate analysis.
Keeping the documents: up to about 15 years for the car
The general term of art. 52 of the CIVA is 10 following calendar years - but for the car (an investment good, art. 51), those 10 years run from the last adjustment under arts. 24/25, and the car’s adjustment period is the year of first use plus the 4 following years. In practice you may need to keep the file up to about 14-15 years after buying. So “I delete the documents after selling” is a bad rule. Keep the invoices and credit notes, the contract, proof of the full value, the car’s characteristics, the business-use justification and the link to the return you filed. If you made a manual adjustment, keep the difference calculation too.
Where FIZ comes in
FIZ takes the purchase VAT to the right field of the return, works out the period from your receipts and keeps the documents organised - so that when you sell the car or need to prove something years later, it’s all at hand.
In summary
- Return: the purchase VAT goes in field 20 (asset), running costs in 24; deducting isn’t receiving a refund right away. The period counts from when you receive the invoice, not the bank debit.
- Selling: can generate VAT; ended depreciation doesn’t exempt the sale; the “5-year refund” (art. 24) has conditions. On IRS, there are capital gains to consider.
- Keep the documents: 10 calendar years (art. 52); for the car this counts from the last adjustment under arts. 24/25 and can reach ~14-15 years. Don’t delete after selling.
Back to the start of the series: the purchase guide.
