Deduction VAT on company cars - what about 2011? 

The VAT administration gives an answer in its decision which appeared on Fisconet on 10 January 2012.

Capital goods which are immovable by nature
The new regime is fully and retroactively applicable as from 1 January 2011 on immovable capital goods which are used for private and business purposes. Businesses which still applied the old regime should therefore possibly proceed to a VAT adjustment.

Choice for other capital goods than immovable property (e.g. company cars)
For services and movable capital goods, companies can choose between applying the old or the new regime for calendar year 2011. This choice is also possible for rented capital goods.

Companies which deducted – in accordance with the old regime – 50% of VAT on their company cars in 2011 and which paid VAT on the lump-sum benefit in kind determined in accordance with the direct tax rules, therefore acted correctly.

If the company cars are used for business purposes for more than 50%, it can be considered to opt for the new regime. Under the new regime, no VAT has to be paid on the benefit in kind for company cars while the deduction of input VAT is still limited to a maximum of 50%. Thus, by applying the new regime, savings equal to the VAT on the benefit in kind can be realized.

Please note however that the choice made between applying the old and the new regime is valid for all capital goods other than immovable property. Companies with a mixed company car park therefore cannot apply the old and the new regime simultaneously depending on the business use of the car.

The decision does not mention by when the choice must be made. Therefore, nothing prohibits companies which applied the old regime in 2011 to retroactively apply the new regime and thus to perform an adjustment to their benefit.