If a M1 category car is used 100% ONLY for work, then:

In case the M1 category car is used for both: work and private trips:

The owner or the responsible user of the vehicle asks for the Road Administration (Maanteeamet) to make a note in the register data, that the car is used only 100% for business trips (free of charge)

This will be public information that can be checked in the vehicle’s background check!

(NB! It may happen that leasing companies as owners can ask for an entry automatically, so the responsible user should check the correctness of such entry).

(even one private ride), taxes must be paid!

An income tax and social tax must be paid from fringe benefit.

The rate is calculated as follows:

The fringe benefit price is 1.96 euros per car kilowatt per month (The car of the age of 0-5 years)

If car is older than five years, the price is 1.47 euros per car kilowatt per month.

Example:

1) A car aged 0-5 years is 133 kw,

from this 133 × 1.96 = we get the fringe benefit rate. It is 260.68 eur

From this rate, we pay to the state:

65.17 euros income tax  and

107.53 euros social tax

taxes totaling 172.70 euros per month

2) A car aged 0-5 years is 300 kW,

from this 300 x 1,96 = we get the fringe benefit rate. It is 588.- euros

From this rate, we pay to the state:

147.- euros income tax and

242.55 euros social tax

taxes totaling 389.55 euros per month

3) A car of more than 5 years old is 300 kW,

From this 300 x 1,47 = we get the fringe benefit rate. It is 441.- eur

From this rate, we pay to the state:

110.25 euros income tax and

181.91 euros social tax

taxes totaling 292.16 euros per month.

VAT can be recovered 100% from:

1) vehicle purchase price

2) from all car related expenses

!!! In case the use of a car changes within 2 years (the first private drive is performed), but the company has deducted input VAT on the total value of this car, the company must RETURN the input tax deducted at 50% to the state, plus interest (after deduction of input tax) and income tax thereon.

In addition, if the note has been deleted from the Road Administration (Maanteeamet) (because the vehicle also started to have private trips), then within 1 (one) year, a new note for this vehicle can not be made (ie, the use purpose can not be changed again).

VAT can be recovered 50% from:

1) vehicle purchase price

2) from all car related expenses