Buying a car for the company: VAT, SCT, depreciation and 2026 limits
Expense and depreciation limits on passenger cars, the monthly lease limit, VAT deduction and the difference for commercial vehicles; with 2026 amounts.
Buying a vehicle is one of the most common tax planning questions. The answer changes completely depending on whether it is a passenger car or a commercial vehicle.
Commercial vehicle (pickup, panel van, minibus etc.)
- VAT is deductible.
- All depreciation and expenses are deductible.
- No limits.
Passenger car
Purchase and depreciation (2026)
| Limit | |
|---|---|
| Maximum cost for depreciation (excluding SCT and VAT) | TRY 1,380,000 |
| If SCT and VAT are added to cost, or for a used car | TRY 2,600,000 |
| Deductible part of SCT + VAT on first acquisition | TRY 1,200,000 |
Depreciation on the part above the limit is not deductible (non-deductible expense). VAT is not deductible on passenger cars; SCT and VAT are added to cost or expensed directly (within the limits). Car depreciation calculator
Running costs
70% of fuel, maintenance, insurance, parking and similar costs is deductible; 30% is non-deductible. Car expense limit
Leasing (2026)
| Limit | |
|---|---|
| Monthly rent (deductible) | TRY 46,000 |
Leasing spreads cash outflow compared with buying and removes depreciation tracking, but the part above TRY 46,000 a month is not deductible.
Which route?
| Situation | Usually better |
|---|---|
| Price under the limit, long use | Buying |
| Expensive car, frequent renewal | Leasing (taking the excess into account) |
| Field team, carrying goods | Commercial vehicle |
Example
Passenger car costing TRY 1,600,000 excluding SCT and VAT, 5-year useful life:
- Annual depreciation TRY 320,000; deductible 1,380,000 ÷ 5 = TRY 276,000.
- The TRY 44,000 difference is non-deductible each year.
Using a partner's car
If a partner uses their own car for company business, the car can be leased to the company; the rent is rental income for the partner and the company withholds 20%. A lease agreement is required for costs such as fuel to be shown as company costs.