Company Car Tax Bill Heads to Parliament; Businesses Unhappy ({{commentsTotal}})

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Nissan Leaf electric car Source: Photo: RIA Novost/Scanpix

The government has approved the latest version of a bill on Thursday which would cut VAT deductions on business vehicles used for private trips, with businesses saying their proposals have been ignored.

The controversial bill was rejected by interest groups and lawmakers twice last year, but could go through this time with a new government.

Currently, the government gives a full tax break on VAT when a company buys a car. The bill would limit the discount to half, although there would still be a number of exemptions, such as for taxis and cars used for driving lessons, as well as vehicles bought for resale and those used solely for business.

Eight business associations, who sent their thoughts on the draft law, said they have been ignored and the latest changes are only minor. The associations said the bill would lead to double taxation.

The new version drops a limit of 2,000 euros for a tax break written into previous versions.