Putting a car in the company’s name does not turn every cost into a deduction. First classify the vehicle and its actual use: passenger transport, utility, public transport, rental, ambulance or another activity. Depreciation and VAT do not read the same way for every category.
Six file controls
- Registration, invoice and owner agree.
- Technical category and actual activity are identified.
- Business travel is separated from private use.
- Book depreciation is bridged to the tax cap.
- Purchase VAT, fuel and maintenance are tested separately.
- Payments, mileage, missions and disposal stay traceable.
1. Classify before calculating
The everyday label ‘company vehicle’ is not enough. Article 10 has a specific rule for passenger vehicles and listed exceptions including public transport, collective staff and school transport, rental-company vehicles assigned to their purpose and ambulances.
| Fact | Document | Question |
|---|---|---|
| Nature | registration/spec | people or goods? |
| Ownership | invoice/contract | purchase, lease or hire? |
| Assignment | schedule/missions | who uses it and why? |
| Activity | registration/licence | real transport or rental? |
| Private use | log/policy | benefit or share to isolate? |
| Disposal | contract/price | date and net value? |
Do not classify from shape or supplier account alone. Confirm the tax category from evidence.
2. Passenger-car tax cap
For covered passenger vehicles, the CGI uses 20% a year and caps total tax-deductible value, spread equally over five years, at MAD 400,000 per vehicle including VAT. The cap also affects the corresponding element of certain leases or hire charges.
| Worked illustration | Books | Tax |
|---|---|---|
| Gross car price | MAD 500,000 | capped base MAD 400,000 |
| Annual five-year charge | MAD 100,000 | MAD 80,000 deductible |
| Illustrative annual gap | — | MAD 20,000 add-back |
| After five years | MAD 500,000 depreciated | MAD 400,000 admitted total |
The example assumes a capped car and book base of MAD 500,000 over five years. Validate actual disposal, hire and use. See the tax depreciation guide.
3. Purchase VAT, fuel and maintenance
Article 106 normally excludes input VAT on passenger vehicles outside its listed exceptions. It also excludes VAT on petroleum products not used as fuel, raw material or manufacturing agent, with detailed exceptions for specified transport. VAT printed on a diesel invoice is not automatic recovery.
- Car purchase: test exclusion and exception
- Diesel: statutory activity and use
- Maintenance: link to vehicle and deduction right
- Toll/parking: mission evidence and own treatment
- Insurance/vehicle tax: classify separately
Where VAT is not recoverable, its treatment in cost or expense must follow the accounting policy.
Do not copy the car rule onto every vehicle
A utility van, taxi, staff minibus, rental vehicle or ambulance may have different treatment. Registration, activity and real use control the test.
4. Evidence use monthly
A proportionate log links date, driver, origin, destination, purpose, kilometres and evidence. It should explain fuel, maintenance and missions, not stage a performance.
- Assign vehicle and keys.
- Record opening/closing odometer.
- Link mission, delivery or meeting.
- Retain fuel and payment.
- Review abnormal consumption.
- Isolate private use or benefit.
- Match maintenance to mileage.
- Archive disposal and derecognition.
BelloPOS may show sales, deliveries or stock events for a day. It does not keep a mileage log or decide private share.
Mistakes to avoid
- Recovering all car VAT.
- Tax-depreciating MAD 500,000.
- Claiming fuel without missions.
- Ignoring private use.
- Mixing repair and improvement.
- Missing the cap in leasing.
Frequently asked questions
What is the passenger-car tax cap?
For covered passenger vehicles, deductible value is capped at MAD 400,000 including VAT over five years at 20%.
Is purchase VAT recoverable?
Article 106 normally excludes it for passenger vehicles, subject to precise exceptions.
Is diesel VAT always recoverable?
No. Exceptions cover specified activities and transport uses.
Are maintenance costs deductible?
They need business use, invoice, payment and classification; a durable improvement may be an asset.
Does BelloPOS track mileage?
No. It may provide sales/delivery events, but the vehicle log remains separate.
What to take away
A sound vehicle file starts with category, then joins use, depreciation cap, VAT, fuel and evidence. The company name on registration is only one link.
Sources
The figures and rules quoted above come from these pages, read on the date given in the article.
Connect journeys to operations
Keep sales and delivery events traceable, then reconcile them with a separately controlled vehicle log.
Read next
Other practical guides on the same subject: