Contact
Maciej Wilczkiewicz

Tax adviser (Poland)
Senior Associate
Phone: + 48 32 330 12 06
E-Mail

The Polish parliament is working on a piece of legislation amending the Personal Income Tax Act and the Corporate Income Tax Act as regards accounting for costs of buying and operating cars.

The lawmakers want to:

1) Increase the amount of car depreciation charges that may be included in
tax-deductible costs.

The current limits are the equivalent of:

  •  EUR 30,000 – for electric cars (meaning vehicles propelled exclusively by electric energy accumulated by connecting the car to an external power source);
  • EUR 20,000 – for all other cars.

According to the new legislation, the limits are supposed to go up to:

  • PLN 225,000 – for electric cars;
  • PLN 150,000 – for all other cars.

2) Increase the amount of comprehensive car insurance premiums that may be included in tax-deductible costs.

The amount of the premium that may be deducted depends on the car value adopted for insurance purposes. If that value:

  • does not exceed the equivalent of EUR 20,000, the entire premium is tax-deductible;
  • exceeds the equivalent of EUR 20,000, the part of the premium attributable to the car value over EUR 20,000 is non-deductible. 

The draft act stipulates that the limitation will apply from 2019 if the car value for insurance purposes exceeds PLN 150,000.   

3) Introduce limits on tax-deductibility of operating costs of cars used on the basis of operating lease, rental or similar agreements.

At present, taxpayers who use cars on the basis of operating lease, rental or similar agreements may deduct the rent set in those agreements without limits as to the amount or percentage.

According to the draft act, that rule will remain in force in respect of cars worth up to:

  • PLN 225,000 – for electric cars;
  • PLN 150,000 – for all other cars.

In the case of more expensive cars, the amount of rent attributable to the excess over those limits will be non-deductible.

Car operating lease, rental or similar agreements signed before 1 January 2019 will be governed by the existing regulations. 

4) Limit the tax-deductibility of operating expenses.

At present, taxpayers who use cars that are recognised as their tangible assets or under leasing agreements in the meaning of tax laws may include the related car operating expenses in tax-deductible costs without limits as to the amount or percentage.

As regards cars used under e.g. a rental agreement, the limit is calculated according to formula: actual mileage driven for taxpayer's purposes multiplied by a standard mileage rate.

According to the draft act, taxpayers who use cars:

  • exclusively for business will be entitled to deduct 100% of operating expenses. This will require keeping a detailed vehicle mileage logbook;
  • also for non-business purposes will be entitled to deduct only 75% of operating expenses.

If you are interested in more detailed information on the planned changes to the tax acts, we will be glad to help.

We will be glad to inform you in more detail on the above subject and provide you with advice on CIT, PIT and VAT issues. Our tax advisers working in Rödl & Partner offices in GdanskGliwiceCracow, PoznanWarsaw and Wroclaw will also answer other tax-related questions that you may have.

Maciej Wilczkiewicz 

27.11.2018