Are There Tax Advantages for Corporate Vehicles?
Yes, but the rules are complex. Different tax advantages apply based on vehicle type, usage purpose, and purchase method. This guide covers the fundamentals applicable in Turkey as of 2026.
Important disclaimer: Tax regulations change frequently. This article is for general information only and does not replace professional tax advice. Always consult a tax advisor before making decisions.
Passenger vs. Commercial Vehicles: The Key Distinction
Most tax advantages depend on vehicle classification. Getting this right is critical:
Passenger vehicles (sedan, hatchback, SUV): Limited VAT deduction, higher SCT, restricted depreciation. However, some advantages still apply.
Commercial vehicles (panel van, pickup, minibus): Full VAT deduction, lower SCT, favorable depreciation. Generally more advantageous for fleet use.
VAT Deduction
Commercial vehicles: VAT paid on commercial vehicles purchased under company name is fully deductible. This means direct savings of approximately 20% of the vehicle price.
Passenger vehicles: VAT on passenger car purchases cannot be directly deducted but can be recorded as an expense, indirectly reducing the tax base.
Special Consumption Tax (SCT)
SCT is one of the largest cost components. Rates range from 10% to 220% based on engine size and CO2 emissions. Choosing low-emission, small-engine vehicles significantly reduces the SCT burden.
Electric vehicles have much lower SCT rates, creating additional financial incentive for fleet electrification.
Depreciation and Expense Deductions
Vehicles on the company balance sheet can be depreciated over their useful life. Passenger vehicles have annual depreciation caps; commercial vehicles have higher limits.
Fuel, maintenance, insurance, parking, and toll expenses can also be written off as business expenses, with some restrictions for passenger vehicles.
Practical Tips
Consider panel van alternatives: For field teams, choosing a passenger van instead of an SUV can provide significant cost advantages through full VAT deduction.
Track EV incentives: With SCT advantages, low fuel costs, and growing charging infrastructure, electric fleet vehicles become more attractive every year.
Compare purchase vs. lease tax impact: In operational leasing, monthly rent is fully deductible as expense. This can be more advantageous than purchase + depreciation in some cases.
Conclusion
The right vehicle type and financing method significantly impact your tax advantages. Before making fleet decisions, conduct detailed analysis with your tax advisor and always include tax effects in TCO calculations.
For comprehensive fleet consultation including tax optimization, feel free to reach out.