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Expenses and deductions

Vehicle expenses start with how the vehicle is used.

Updated
Sources reviewed
Tax year
2026

Vehicle costs in a sole proprietorship are deductible in proportion to business use. The share is shown with a mileage log recording the date, purpose, kilometres and odometer reading for every business trip, and the costs are itemised on the vehicle operating statement (RSK 4.03) filed with the tax return. Driving between home and a fixed workplace is personal. A flat estimated deduction without a log is not accepted.

Key figures

Form
RSK 4.03
vehicle operating statement
Requirement
mileage log
date, purpose, km, odometer
Deduction
business-use share
Not deductible
commuting to a fixed workplace

The same car can serve both work and personal life. To discuss the correct expense treatment, you need records of its use, as well as receipts for fuel and other purchases.

Understand the supporting records

RSK 4.03 is an operating statement for certain passenger vehicles used both privately and in an individual’s business. It records mileage, odometer readings, costs and the division of use. Use the instructions and form for the correct filing year. Skatturinn: RSK 4.03, 2026 filing.

Do not choose a business-use percentage on instinct alone. Create records you can explain and review with whoever helps prepare your return.

Keep a straightforward journey record

Record the date, project or purpose, route and distance. Keep odometer readings and the period of use available too. File cost evidence against the same vehicle and period so it does not get mixed with unrelated activity.

This is a practical way to collect information. It does not, by itself, determine which deduction is available or which form applies to your circumstances.

Check VAT separately

Input-VAT rules for passenger vehicles are restricted and can differ from business-expense deduction rules. Do not assume VAT on vehicle costs is deductible simply because the car has some business use. Skatturinn: input VAT and passenger vehicles.

How Fustle helps

Invoicing + Expenses helps organise receipts and expense records. You review the information extracted by AI and explain how a purchase relates to work. Recording a receipt does not approve a deduction, and you remain responsible for filings on this plan.

Quick answers

Is a fuel receipt enough on its own? It does not explain how the vehicle was used. Collect usage records as well.

Can I deduct every vehicle cost? Do not assume so. Treatment depends on the vehicle, its use and the applicable rules.

Read more about expense records

Sources checked 23 September 2026. General recordkeeping guidance; obtain an assessment of deductions for your circumstances.

Frequently asked questions

What must a mileage log contain?

Date, start and destination, purpose, kilometres for the trip and the odometer reading at start and end. The log is kept as you go; a reconstruction afterwards is not accepted.

Can I use a per-kilometre rate instead of actual costs?

The per-kilometre rate in Skatturinn's guidelines applies when an employee receives a mileage allowance from an employer. In your own business, vehicle costs are generally expensed on actual costs and the business-use share on RSK 4.03.

Can I deduct the VAT on the car?

Input VAT on passenger cars is generally not deductible, with specific exceptions for vehicles used only in taxable business. The running costs of the car remain deductible from income in proportion to business use.

Sources

General information, not advice on your situation. Skatturinn and other authorities assess each case. Check the review date and sources before relying on a figure.

Where does Fustle fit in?

Record the work and create the invoice. The service you choose determines the support included.

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