Not all expenses on a passenger car are subject to the same limit. Monthly rent is capped at a fixed amount, ongoing operating expenses at a percentage, and special consumption tax (ÖTV) and value added tax (KDV) paid on purchase, where they are expensed directly, at a separate ceiling. Depreciation is capped according to the year of acquisition. The 2025 expense limits cannot be applied directly to 2026 expenses. Use of the vehicle in the business is the first condition, but even where that condition is met, not every expense can be deducted in full. [1]
Legal Nature of the Practice and How It Differs from Other Obligations
The expense restriction on a passenger car is not a single percentage calculation. Rent, ongoing operating expenses, taxes paid on purchase and depreciation each have their own limits, and the way the vehicle is used affects the result.
Which Vehicles and Businesses Are Covered?
In evaluating a passenger car, heading 87.03 of the Turkish Customs Tariff Schedule (Türk Gümrük Tarife Cetveli) is important. The everyday description recorded on the registration document, or the fact that the vehicle was bought for commercial purposes, is not enough on its own. Ambulances, hearses and cash-transport vehicles, as well as certain vehicles used in specific fields that do not require traffic registration, are examined separately.
Persons who wholly or partly carry on the business of renting passenger cars or operating them in other ways are covered by a special exception for the vehicles they use for that purpose. A car that a rental company rents to a customer and a car used by a company manager may therefore not lead to the same result. Listing vehicle rental in a company's activity code does not automatically take its entire fleet outside the restriction.
Reading the Different 2026 Limits Together
| Expense type | 2026 treatment |
|---|---|
| Ordinary monthly vehicle rent | 46,000 TL per vehicle, excluding KDV |
| Direct expensing of ÖTV and KDV paid on purchase | Up to 1,200,000 TL in total |
| Ongoing operating expenses | Up to 70% of the eligible expense |
| Depreciation on the initial acquisition cost, excluding taxes | Up to 1,380,000 TL |
| Depreciation where taxes are added to cost, or for a second-hand vehicle | Up to 2,600,000 TL |
These amounts are not successive parts of the same tax advantage. The calculation depends on whether the taxes are treated as an expense or as part of cost. For depreciation, the amount for the year of acquisition is the one that applies; a ceiling set for a car acquired in 2025 is not raised simply because the calendar year is now 2026.
Excess Over the Rent Limit and Value Added Tax
Assume a monthly rent of 60,000 TL excluding KDV in 2026, with 20% KDV. The eligible rent expense is 46,000 TL, and the related deductible KDV, subject to the other conditions, is 9,200 TL. The 14,000 TL excess portion of the rent and the 2,800 TL KDV on that portion, which cannot be deducted in the earnings calculation, together form a total adjustment of 16,800 TL for the company.
For a self-employed professional, a commercial balance-sheet correction alone is not enough; only the permitted amount should be recorded in the professional expense account. For groups such as banks and insurance companies, which have no KDV deduction, the effect of the limit on the KDV-inclusive expense is calculated separately. The KDV-registered example above does not apply to these businesses as it stands.
For daily rental, the monthly cap is divided by the number of days in the month in which the rental takes place. February and a 31-day month do not have the same daily limit. Comparing the fee for a few days with the full monthly cap can produce an incorrect result.
Long-Term Rent and Year Differences in Prepayment
In a commercial activity, for rentals that span more than one year, the expense for each month is assessed against the limit of the year concerned. Paying the full amount of a two-year contract up front does not carry the next year's expense back into the year of payment.
In a self-employed professional activity, the period of a prepaid rent expense may differ because of the cash-basis (collection and payment) principle. The guide explains that where a professional prepays, the rent limit in force in the payment period is applied. A lawyer and a commercial business that rent the same car on the same date therefore cannot necessarily prepare identical expense schedules by looking at the contract alone.
Financial leasing should also not be confused with ordinary monthly rent. The payment is split into principal and interest, and the value tracked as a right on the asset side and the depreciation limit are assessed. Where interest is capitalized in the first year, and expensed in later years, the choice differs. Eligible interest expensed directly in a later year may also be subject to the 70% limit.
Which Expenses Are Subject to the 70% Rule?
Eligible ongoing expenses for a vehicle used in the business, such as repairs, maintenance, fuel, insurance, comprehensive (kasko) insurance, parking and motorway tolls, may be deducted up to 70%. The vehicle may be owned by the business or rented. An expense made for private life cannot be expensed directly at 70% without first establishing a business connection.
Automatically applying 70% to a rent amount that is already limited by the rent cap mixes two different rules. Likewise, depreciation has its own monetary ceiling. Recording expenses collectively as vehicle expenses in the accounts does not remove their distinct legal categories.
Motor vehicle tax (MTV) on a passenger car is not accepted as an expense, except under the specific exemption in the law. Expensing 70% of MTV is therefore not a general solution. The special position of vehicles rented out in a vehicle rental business is also checked separately. The KDV related to a non-deductible expense is assessed under Article 30/d of the VAT Law (KDV Kanunu).
Depreciation and a Partial-Period Example
In June 2026, a passenger car acquired for 3,000,000 TL with the taxes added to its cost has a depreciation ceiling of 2,600,000 TL for the purposes of the restriction. Assuming ordinary five-year depreciation at a rate of 20%, the annual deductible amount is 520,000 TL. For the seven-month partial period including June, the amount is approximately 303,333 TL.
Depreciation that cannot be booked in the first year because of the partial period is taken into account in the last year of the amortization period. This does not mean the cost above the ceiling can be freely expensed in the last year. The cost difference that cannot be deducted by law because of the partial-period difference should be tracked separately. The same ceiling assessment applies to rights acquired through financial leasing.
Which Documents Should Be Kept in the Vehicle File?
The purchase invoice, the GTİP assessment, the rent or finance lease contract, the delivery date, a description of business use, the expense documents and the depreciation schedule should be kept together under the same vehicle record. The reason for the limit used in each year should be recorded.
In particular, the following should be checked during reconciliation: applying a new year's ceiling to older vehicles, using the same taxes both as an expense and as part of cost, and applying the 70% rule to MTV. The decision to buy or rent a vehicle should be taken not only on the basis of its tax expense, but also with cash flow, financing, useful life and the consequences of disposal in view.
Decision to Make Before Acting and the File to Prepare
Keep the year of acquisition, the cost, the rental period and the expense types separate in the vehicle file. Do not apply the 70% limit automatically to all items; calculate the rent and depreciation limits on their own terms. Also check the VAT consequence of any non-deductible expense.