Can you claim the VAT back on a motorhome?

In this blog post, we will answer the following question: Can you claim the VAT back on a motorhome? We will explain which type of vehicles you can claim the VAT back and why. We will also guide you on paying all the necessary taxes for your motorhome. 

Can you claim the VAT back on a motorhome?

You can claim the VAT back on a motorhome only if it is used for business purposes, for example, if you are renting it. As a general rule, it is not possible to recover VAT on the purchase or fitting out of a non-utility motor vehicle (caravan, RV, camper-vans, passenger vehicle, station wagons).

On the other hand, VAN can be claimed back on the following vehicle types:

  • road vehicles with a driver’s seat with more than 8 seats, used by companies to bring staff to the workplace;
  • vehicles acquired by public passenger transport companies and used exclusively for the performance of said transport;
  • three-wheeled vehicles;
  • light-duty vehicles;
  •  truck vehicles;
  • towing vehicles;
  •  and more generally the vehicles listed in the texts appended to the Highway Code under the headings “very special vehicles”.

In the automotive field, the determining criterion is that of the use for which the machine was designed, and not its actual use. The category in which a motor vehicle has been approved by the mining department is an important indication of whether you can deduct VAT on the purchase. However, this may not be enough.

How to claim the VAT back on a motorhome

As we already told you, VAT cannot be recovered on a mixed-use motorhome, received as a specialized motor vehicle. Moreover, VAT relating to services (repairs, etc.) relating to these vehicles is also not deductible.

However, this rule has exceptions, in particular for vehicles that are rented out.

As such, the Council of State has just clarified the conditions for the application of this exception. The senior magistrates thus annulled the administrative doctrine which required that, for VAT to be deductible, the vehicles concerned be exclusively used for rental activity.

VAT on vehicles designed to transport people or for mixed-use is therefore deductible if they are used solely for rental purposes.

Clarification: the administrative doctrine sets another condition for benefiting from the deduction of VAT. It requires that the rental be subject to VAT. This condition, however, was validated by the Council of State.

 A dealer cannot, therefore, recover the VAT on courtesy vehicles that he makes available to his customers free of charge during the time necessary for the repair of their own vehicle or the delivery of the new or second-hand vehicle they ordered.

VAT on passenger vehicles is not recoverable

A company is not authorized to recover the VAT paid in connection with the purchase of a vehicle allowing the transport of people or mixed-use. All types of private cars (including in particular 4X4 and camper vans), as well as two-wheelers (scooters).

VAT is not recoverable, regardless of the use that the company makes of these vehicles.

The rental of these vehicles does not give the right to deduct VAT either.

Is the VAT on the repair and maintenance of a motorhome recoverable?

VAT is not deductible neither for the purchase of spare parts and vehicle accessories nor for the services relating to their repair. Ask your accountant for more information.

A company may, however, deduct the VAT from the purchase of a commercial vehicle (truck, 2-seater car, etc.) and of all vehicles considered “special” by the highway code. 

This may include, in particular, any vehicle with more than eight seats (in addition to that of the driver), used for the transport of company personnel, or intended for teaching driving.

The repair, maintenance and leasing operations relating to this type of vehicle, as well as all spare parts, give the right to recovery of VAT.

In addition, is also concerned by this recovery of VAT:

  • Any utility vehicle
  • Any new vehicle, the object of which is to be resold by dealers and traders
  • Any vehicle intended for rental
  • Any vehicle falling under the category of “very special vehicles” with regard to the highway code

It will be necessary to refer to the type of vehicle listed on the registration certificate in order to determine whether the VAT on the vehicle is recoverable or not.

Specific rules apply to tourist vehicles used in the context of passenger transport activity.

Can you claim back tax if you live in a motorhome?

Yes, you can claim back tax and apply for motorhome tax deductions if you live in a camper, caravan, RV or any other type of motorhome.

Here are some ideas:

  • If the motorhome is registered as your second home, apply for a home mortgage interest deduction (your bank will be able to advise you on the terms and conditions);
  • Claim back any expenses  and millages while travelling with your motorhome for a business trip; 
  • If you rent your caravan or RV, deduct any expenses related to the maintenance, repairs, furniture buying and other expenses. 
  • You can also apply for an RV sales deduction tax if you purchased your motorhome with cash and you don’t pay interest on a loan.

We recommend you consult a financial advisor before making any claims but do take into consideration the above schemes. 

Do you have to pay taxes when renting a motorhome?

The taxes that you have to pay for renting a motorhome can be classified into those that are mandatory when registering it and those that are needed once we have already registered the caravan. If you are renting your vehicle, there are indeed certain taxes that you must pay.

  1. VAT: Since you are considered an entrepreneur for VAT purposes, you will have to comply with the following obligations:
  • Bring the output VAT book (here you will list your income invoices) and the input VAT book (here you will list your expense invoices). Only in the event that you acquire an investment property should you also keep the investment property book.
  • You must submit the VAT form quarterly, where you will reflect the VAT that you charge on your invoices and the VAT that you pay on your invoices for deductible expenses.
  • Finally, and once a year, you must submit the annual VAT summary.
  1. Personal income tax: For the purposes of personal income tax, you are not considered an entrepreneur, so the benefits you obtain with the rental of your motorhome must be reflected in the section on income from movable capital. 

Note that I have spoken of benefits not income, therefore, to calculate the amount for which you must pay you must perform the following operation:

From the total income received (adding the taxable bases of all the rents), the taxable bases of the expenses that are considered deductible for the management of the motorhome rental must be subtracted.

  1. Deductible expenses for the calculation of the benefit: To reduce the profit obtained from the rental, it is highly advisable that you keep track of the expenses you have to incur in order to manage the rental of your motorhome. 

Next, I list the most common expenses:

  • The cost of the commission charged by the platform. Specifically in this case the amount amounts to 4% of the price of your rental.
  • Vehicle insurance. You can consider as a deductible the proportional part of your insurance based on the rental days.
  • Complimentary insurance, if you take out complementary insurance to yours mandatory when renting your motorhome.
  • Housekeeping. If you use an external cleaning service after each rental.
  • Maintenance expenses. Depending on the number of kilometres travelled in the rental periods of the motorhome, you could justify including as a deductible expense a proportional part of the workshop invoice for the maintenance and set-up of the vehicle.

The bottom line 

We hope that this article helped you better understand how to claim back VAT but also how to pay your motorhome taxes. In case you have any doubts, we suggest you contact an accountant or a financial advisor, as they would be able to analyze your particular case and guide you through the whole process.

If you have any questions for us, please feel free to leave a comment!

References

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