VTC Chartered Accountant

Yes. A VTC chartered accountant will confirm it: unlike an ordinary company, a VTC driver can deduct the VAT on their vehicle (purchase, fuel, upkeep) under two cumulative conditions: being a taxable person liable for VAT, therefore on the actual regime and not under the basic exemption, and using the vehicle exclusively for passenger transport. The ride itself carries a reduced 10% VAT rate.

This dual mechanism, VAT collected at 10% on the ride and VAT recovered at 20% on the vehicle, places the VTC in a singular tax position. It improves cash flow and profitability, provided the right regime is chosen from the outset.

The VTC is an individual public passenger transport activity, carried out by prior booking. Its cost structure is dominated by a single, heavy asset: the vehicle. The result therefore hinges on few variables, but sensitive ones.

• VAT on the ride: reduced rate of 10% (article 279 of the Tax Code), common to taxis and VTCs.
• VAT on the vehicle: in principle non-deductible for a passenger car, except for the exception reserved for individual public passenger transport.
• Variable costs: fuel, tolls, upkeep, insurance, washing, and above all the fees charged by booking platforms.
• Vehicle financing: purchase, lease with purchase option (LOA) or long-term lease (LLD), each with a different accounting and VAT treatment.

Our reading: for a VTC, the correct tax treatment of the vehicle is where a significant share of net income is won or lost.

This is the point that sets the VTC apart from a conventional business. The general rule holds that VAT charged on a passenger car (category M, designed to carry persons) is non-deductible. But the BOFiP provides an explicit exception: any public transport company may deduct the tax charged on the vehicles it uses exclusively for that transport. The text expressly names vehicles for transport with a driver.

The underestimated risk: the basic exemption. A driver who starts as a micro-entrepreneur under the basic exemption thresholds charges no VAT, but recovers none either. They therefore lose the trade's main advantage: the VAT deduction on the vehicle. This advantage exists only for the VAT-liable taxable person, that is, on the actual regime or having opted for VAT. The comfort of the micro regime is paid for in VAT not recovered on the main investment.

In practice, two conditions must be met and traced: (i) the status of VAT-liable taxable person, (ii) the exclusive use of the vehicle for the transport activity. Significant personal use of the vehicle weakens the deduction. We document this use and a mileage log from the moment the file is opened.

The status determines access to the VAT deduction and how the result is calculated. There are three options.

• The micro-entrepreneur: light reporting, record of receipts, no balance sheet. Simple, but no expenses deducted and no VAT recovered on the vehicle as long as you remain under the basic exemption.
• The sole trader on the actual regime: keeping accounts, deducting real costs and VAT, depreciating the vehicle. More demanding, often more profitable as soon as there is a vehicle to finance.
• The company (EURL, SASU) subject to corporate income tax: useful to steer compensation, separate assets, prepare a fleet or the arrival of partners.

Trade-off: the micro regime suits a cautious start, with no heavy vehicle and low volumes. As soon as the vehicle purchase, fuel and fees weigh in, the actual regime regains the advantage thanks to recovered VAT and deductible costs. This choice is quantified before registration, because reversing it afterwards costs time and sometimes money. We simulate it net income against net income, VAT included.

On access to the profession, the framework is regulated: a VTC professional card valid for 5 years, registration of the business in the VTC register (REVTC) renewable every 5 years for 170 euros, and proof of a financial capacity of 1,500 euros per vehicle. This capacity is waived if the driver owns the vehicle or holds a lease of at least 6 months.

Do not confuse VTC and taxi. The taxi operates a parking authorisation (ADS), picks up clients hailed on the street using a meter, and benefits from a partial excise-duty refund on fuel; the VTC works by prior booking, with no street hailing or regulated meter. The obligations and certain advantages diverge, as we detail on our page dedicated to the accounting differences with the taxi.

Consider a representative case, deliberately illustrative. A driver sets up and buys a vehicle for 30,000 euros including tax for the activity. On the micro regime, they recover nothing on this purchase and deduct their costs on a flat-rate basis, without accounting for their real fuel or upkeep.

On the actual regime, as a VAT-liable taxable person with a vehicle used exclusively for the activity, they recover the VAT on the purchase, then on each refuelling and each service. Since they collect 10% on their rides but recover 20% on their purchases, the year of acquisition generally ends with a VAT credit, hence a refund or a reduction of instalments. Over time, they depreciate the vehicle and deduct all their real costs.

Our reading: for a driver who drives a lot and finances a vehicle, the actual regime often wins clearly, provided accounts are kept properly and exclusive use is secured. The exact figures depend on mileage, the vehicle price and the financing method; they are calculated file by file, never as a general rule.

In the VTC files we take over, the same sticking points recur.

• Starting on the micro regime by default, without simulating the actual regime, and lastingly losing the VAT on the vehicle.
• Mixing private and professional use of the vehicle, which weakens the VAT deduction in case of an audit.
• Forgetting to anticipate the VAT credit of the purchase year and suffering avoidable cash-flow strain.
• Confusing the basic exemption and the actual regime, and believing one recovers VAT that one does not charge.
• Neglecting platform fees in the margin calculation, and overestimating real profitability per ride.
• Choosing a vehicle financing method (purchase, LOA, LLD) without comparing its VAT and cash-flow impact.

2026 points of vigilance: the boundary between the basic exemption and the VAT-liable actual regime remains the sensitive point, as it governs access to the vehicle deduction. Before any purchase, validate your regime; after the purchase, secure exclusive use and mileage traceability. These are the two conditions the tax authorities look at.

We support VTC drivers and operators across the whole cycle: choice of status and structure, creation and registration in the register, setting up VAT and accounting, monthly steering of profitability and cash flow.

• A quantified micro versus actual trade-off before registration, so as not to lock in a poor choice.
• The securing of the VAT deduction on the vehicle, condition by condition, with the expected traceability.
• Monitoring of the VAT credit and its refunds, particularly in the year of acquisition.
• A dashboard of cost per kilometre and margin per ride, to decide on a second vehicle or a change of platform.

This article provides general principles; a decision tailored to your situation requires reviewing your documents, your mileage and your regime in light of the law in force. Let us discuss your file to set the most appropriate strategy, covering status, vehicle and VAT.

To go further, you can prepare your setup with our business creation service in Paris or frame your director's compensation if you opt for a company.