A company car is a popular question among s.r.o. owners. A car can indeed reduce your tax base — but only if it is registered correctly and used according to the rules.
Which car costs you can deduct
If the car is used for business, the company can account for acquisition costs (through depreciation or leasing), fuel, service, insurance and road fees. Documents are required: purchase or leasing agreement, invoices, payment records and proof that the car is really needed for the business.
VAT on a car
If the company is a VAT payer, input VAT can be reclaimed only for the share of use in taxable activity. For mixed use (business and private trips) the deduction is proportional, which is why it is important to keep a logbook (kniha jízd). Without it, the tax office may challenge the deduction.
Private use of the car
If a director or employee uses the company car privately, a taxable benefit arises. For a passenger car it is calculated as a percentage of the price per month, with a minimum amount, and the company also accounts for related taxes and contributions. The exact calculation depends on the recipient’s status, and we handle it as part of bookkeeping.
Buy or lease
- Purchase — the car is owned by the company, depreciated in groups, suitable for long-term use.
- Finance lease — costs are spread across payments, lower initial burden.
- Operating lease and rental — convenient if you need a regularly renewed fleet.
What else matters
- arrange mandatory liability insurance (povinné ručení) and, if needed, comprehensive cover;
- think through who drives the car and how;
- keep a logbook and save receipts;
- discuss the tax consequences of selling the car with your accountant in advance.
If you are just setting up a company, our specialists can help you plan these issues into the structure, and bookkeeping will record the car correctly.
