How much VAT is there on taxi rides?
Taxi transport in the Netherlands falls under passenger transport. The tax authorities state that this is subject to the low VAT rate of 9%. This means that the fare you pay usually includes 9% VAT. This applies to regular taxis as well as comparable passenger transport. Only in specific situations, such as international passenger transport, a different rate may apply. For domestic journeys, you can practically assume that the taxi will charge 9 per cent VAT.
When is VAT on taxi costs deductible?
The VAT on a taxi ride is deductible if the ride is business-related and your company has VAT-taxed turnover. The tax authorities look at the purpose of the trip and not at the means of transport. If you use the taxi for private purposes or for commuting, the VAT is not deductible. Similarly, if you have exclusively exempt turnover or use the small business scheme, you may not reclaim VAT.
In practice, VAT on taxi expenses is deductible if all the conditions below are met:
- The taxi ride has a clear business purpose, such as a customer visit or business appointment.
- The ride is not a commute.
- You are liable for VAT on the activities for which you make the trip.
- VAT was actually charged on the trip.
- You have a valid proof of ride.
If the taxi ride does not meet these conditions, the VAT remains part of the cost and you cannot deduct it as input tax.
Need receipt or invoice for deduction?
For VAT deduction, you need proof. For taxi rides, the ticket or receipt counts as an invoice. So you do not need to have a detailed invoice in your name. However, the proof must make it clear that VAT has been paid and the amount. Without such proof, you cannot deduct VAT.
VAT at Uber
For VAT, the tax authorities do not look at the name of the provider, but at the service. Uber rides fall under passenger transport and are therefore also subject to the 9% VAT rate. VAT is deductible if the ride was business and if VAT was actually charged. You will usually receive a digital proof of payment for this. If no VAT is stated on this, you cannot deduct VAT either, but the costs can still be business-related for your profit calculation.
Processing in your accounts
You process business taxi costs in your accounts as travel expenses or transport costs. You enter the VAT on the ride as input tax in your VAT return, provided you are entitled to a deduction. You keep the proof of the trip in your records. The tax authorities require you to keep this information for several years. By clearly noting that the trip was business-related, you avoid questions in the event of an audit.
VAT on other means of transport
Besides taxis, as an entrepreneur you may use other means of transport. Different rules apply for VAT purposes than for taxi transport. Here, the tax authorities distinguish between own transport and public transport. It is important to clearly understand this difference, as it affects your VAT deduction.
Own transport
Do you use your private car and declare a kilometre allowance, then there is no VAT in that. In that case, you cannot deduct VAT. If you have a company car, you may deduct VAT on car expenses for business use. Private use, including commuting, must be excluded or corrected.
Public transport
Public transport, like taxi, falls under passenger transport with 9% VAT. For business trips, you may deduct this VAT. Here, the transport ticket counts as an invoice. Again, commuting is considered private for VAT purposes and therefore not deductible.
