Taxes Consolidation Act 1997 section 380M

Limit on deductions, etc. for hiring cars

Section 380M restricts the tax deduction available for vehicle hire costs (other than hire-purchase) by adjusting the otherwise allowable amount according to the vehicle's emission category and its retail price at the time it was first made available.

• Where a deduction for vehicle hire costs would otherwise be allowable under section 375, section 380M requires that amount to be adjusted — upward or downward — based on the vehicle's emission category.
• For category A and B vehicles, the deductible hire cost is scaled proportionately: the ratio of €24,000 (the specified amount) to the vehicle's retail price is applied to the hire expenditure.
• For category C vehicles, where the retail price is at or below €24,000 the deduction is halved; where the retail price exceeds €24,000, the deduction is reduced in the proportion that €12,000 (50% of €24,000) bears to the retail price.
• For category D, E, and F vehicles the deductible amount is nil; and from 1 January 2027 category B moves to the current category C treatment, while category C joins D, E, and F with a nil deduction.