European Commission Adopts Proposal for Council Decision on Estonia Input VAT Deduction for Car Expenditures

The European Commission (EC) Feb. 4 adopted Proposed Council Implementing Decision No. COM (2025) 29, on Estonia’s request to extend a special measure derogating from Articles 26(1)(a), 168, and 168a of the VAT Directive, to continue restricting input VAT deduction rights on passenger cars not wholly used for business purposes. The derogation permits Estonia to limit the VAT deduction to 50 percent on the purchase, lease, intra-Community acquisition, or import of such cars, and for related repair and fuel costs. The proposed decision includes measures to: 1) extend Estonia’s authorization for the derogation to Dec. 31, 2027, from Dec. 31, ...