On a €80 TTC diesel fill-up for a passenger car, a company can recover around €11 in VAT. Multiplied across a fleet of 50 vehicles and hundreds of fill-ups per year, the amount becomes significant, and is often left on the table simply for lack of knowing the exact rules. Recoverable VAT on fuel for businesses follows precise rates that depend on the vehicle type (passenger car or commercial vehicle) and the fuel used (petrol, diesel, electricity, LPG). These rates are codified in the BOFiP (BOI-TVA-DED-30-30-40) and have not changed since the petrol/diesel alignment of 2022,[1] with the exception of a tax ruling from April 2025 covering passenger cars with a financial consideration. This guide sets out the rules applicable in 2026, the conditions to meet, and the pitfalls to avoid.
- Passenger cars (VP designation on the registration document) can recover 80% of VAT on petrol and diesel. Commercial vehicles (VU) can recover 100%.
- Electricity is recoverable at 100% regardless of vehicle category: it is the only fuel that is fully deductible for a passenger car.
- Combining VAT on fuel with the flat-rate mileage allowance is prohibited: the two mechanisms are mutually exclusive.
VAT recovery rates by fuel type and vehicle category
The basic rule is straightforward: vehicles designed to carry passengers (VP designation on the registration document) are subject to a partial limitation on the right to deduct. Commercial vehicles (VU, trucks, vans) benefit from full deductibility. Petrol and diesel have been aligned since 2022, and both follow the same rates.
| Fuel | Passenger car (VP) | Commercial vehicle (VU) |
|---|---|---|
| Petrol (SP95, SP98) | 80 % | 100 % |
| Diesel | 80 % | 100 % |
| Superethanol E85 | 80 % | 100 % |
| LPG (gaseous state) | 50 % | 100 % |
| CNG (compressed natural gas) | 100 % | 100 % |
| Electricity (charging) | 100 % | 100 % |
Calculation example: on €100 ex-VAT of diesel for a passenger car, the VAT charged is €20 (standard 20% rate). The company can recover 20 € × 80% = €16. The remaining €4 is treated as a non-deductible expense. For the same fill-up in a commercial vehicle: €20 recovered in full.
VAT in France is applied to the ex-tax price of fuel, including the TICPE (Domestic Tax on Energy Products), which inflates the tax base. TICPE recovery is a separate mechanism, which can be combined with VAT recovery for professional transport fleets.
Special case: electricity recoverable at 100%
Electricity benefits from a favourable exceptional regime: VAT is deductible at 100% even for passenger cars. This is a genuine fiscal incentive for fleets committed to their energy transition. An electric passenger car consumes, depending on the model, between 15 and 25 kWh per 100 km. For a fleet charging on-site or at public charging points with invoiced billing, the 100% recoverable VAT represents a measurable gain.
Condition: charging must be documented by an invoice showing the VAT amount. Anonymous terminal receipts without visible VAT (consumer card payments) do not allow recovery. Priority should be given to professional subscriptions with monthly invoicing (GIREVE, Chargemap Business, Beev), which issue compliant invoices.
CNG (compressed natural gas for vehicles) also benefits from 100% deductibility for passenger cars, a frequently overlooked advantage for transport and logistics fleets operating CNG vehicles.
Switching a petrol passenger car to an electric passenger car transforms VAT deductibility from 80% to 100%. For a fleet of 50 vehicles with €5,000 ex-VAT in fuel costs per vehicle per year, the additional recoverable VAT amounts to 50,000 € × 20% × 20 pts = €2,000 extra per year, on top of the other tax benefits of electric vehicles.
Conditions to meet in order to deduct VAT
Recovering VAT on fuel is only possible when three cumulative conditions are met, as set out in the BOFiP (BOI-TVA-DED-30-30-40):
1. Business use of the journey. VAT is only deductible on fuel consumed during journeys related to business activities (client meetings, job sites, deliveries, travel between locations). Home-to-work commutes are treated as private and do not give rise to deduction. For a vehicle with mixed use (business and personal), only the business portion is deductible, which requires keeping a logbook or using a telematics tool that distinguishes business kilometres from personal kilometres.
2. Compliant supporting document. The invoice or fuel receipt must show the ex-VAT amount, the VAT rate and the VAT amount. An invoice with no visible VAT (as is the case with some consumer fuel cards or cash payments) does not allow recovery. Professional fuel cards generate monthly statements compliant with the DGFiP (French tax authority), which simplifies bulk recovery.
3. Archiving. Supporting documents must be retained for tax audits. The statute of limitations for VAT is 3 years. Digitised invoices are accepted provided they are archived with probative value (electronic signature or reliable audit trail).
Mileage allowance and VAT: two incompatible mechanisms
The flat-rate mileage allowance (used to reimburse employees who use their personal vehicle for work) and VAT recovery on fuel are mutually exclusive. This point is codified in the BOFiP (BOI-TVA-DED-30-30-20) and there are no exceptions.
In practice: if the company reimburses an employee on the basis of the mileage allowance, it cannot also recover VAT on the fuel for that journey. The mileage allowance already incorporates a flat-rate compensation that covers fuel. Deducting the VAT as well would constitute a double deduction. Conversely, if the company pays for fuel directly via a professional fuel card, the mileage allowance does not apply and VAT is recoverable at the rates shown in the table above.
For fleets equipped with dedicated fuel cards, the logic is clear: the company pays for fuel, VAT is recoverable, and reimbursements to employees only apply to expenses not covered by the card (taxis, tolls, etc.). See our comparison of fuel cards vs. mileage reimbursement.
April 2025 tax ruling: passenger cars with a financial consideration
A tax ruling dated 30 April 2025 (BOI-RES-TVA-000161) introduced a notable development for passenger cars.[2] It is now possible to recover the full VAT on a passenger car, including fuel, if the user (employee or director) pays an identifiable financial consideration for their private use.
In practice: if the company charges an employee a monthly rental fee for the private use of a company car, that fee constitutes a consideration that lifts the exclusion of the right to deduct. The tax authority validates in this case a 100% VAT recovery on all vehicle costs (acquisition, maintenance, fuel). This mechanism must be applied carefully, with the consideration formally documented in the vehicle allocation agreement. Consult an accountant before changing current practices.
This ruling interacts with the rules on company car benefit in kind. Both mechanisms must be calibrated together to avoid an adjustment on either item.
Frequently asked questions
References
- BOFiP, BOI-TVA-DED-30-30-40 — Petroleum products, bofip.impots.gouv.fr — VAT deductibility rates on fuel by vehicle type; petrol/diesel alignment since 2022. ↩
- Swapn / L'expert-comptable, Recoverable VAT on fuel: 2026 Guide, swapn.fr + l-expert-comptable.com — tax ruling 30 April 2025 BOI-RES-TVA-000161: passenger car with identifiable financial consideration. ↩
Vehicle and fleet taxation: Fuel VAT, company vehicle tax (ex-TVS), benefit in kind and TICPE: all fleet tax topics are covered in the complete business taxation guide.
