Can I Claim Vehicle Costs as a Business Expense in Brazil?
Partly. Vehicles used in the business can be company costs, but private use needs care and your contador's view.
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What Receita Federal do Brasil says
How a cost affects income tax depends on the regime. Under Lucro Real an operating expense is deductible when it is necessary for the activity and the upkeep of the business, and usual or normal for its kind of business (RIR/2018 art. 311). Under Lucro Presumido and the Simples Nacional tax is worked out from revenue, so expenses do not reduce IRPJ or CSLL, though they still belong in the accounts. A vehicle the company needs for its activity fits the test; private use by partners does not. The vehicle itself is a fixed asset and is depreciated. Keep the vehicle's registration document, the purchase NF-e and the insurance policy together, because they show whether the vehicle belongs to the company and how it is used.
When you can claim
- Delivery or service vehicles used in the activity
- Fuel and maintenance for company vehicles
- Tolls and parking on business trips
- Vehicle insurance and the annual licensing fee for company vehicles
- Leasing of a vehicle the company uses in its activity
When you cannot claim
- A partner's private car used mainly for personal trips
- Fines for traffic offences
Good to know
Pro tip: Keep a simple log of business trips for any vehicle that is also used privately. Send Finn each fuel and repair document with the plate number noted, so costs can be grouped by vehicle.
Important: Fines for breaking non-tax law are not deductible under Lucro Real. If a partner uses a company car privately, tell your contador. The private use may need to be treated as a benefit to that person rather than a company cost.
Related expenses
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