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Revolutionary answer of the Minister of Finance to a parliamentary question regarding possible depreciation of cars used also for private purposes

2014-10-14

The entrepreneur has the right to include under tax deductible expenses depreciation charges on a vehicle if such vehicle is used mainly for the conducted business activity. Such position of the Minister of Finance was presented by Janusz Cichoń, Secretary of State at the Ministry, in response to a parliamentary question no. 27342/2014 of 9 July 2014.

The answer to the parliamentary question met with interest of taxpayers and experts, as the position in this regard to date has not been so univocal. Marcin Sobieszek, tax advisor and partner at ATA TAX, commented on the answer in the Rzeczpospolita daily.

– Tax authorities have claimed for many years that if a company car is used for private purposes, it cannot be depreciated and included under tax deductible expenses – admits our expert in Rzeczpospolita. – It applied not only to vehicles but other property as well, e.g. phones or computers. The change of such position is a revolution.

As emphasised by our expert, positive position of the Minister of Finance about depreciation does not mean, however, that tax authorities will tolerate any abuse by taxpayers:

– If a vehicle is used predominantly for business activity, depreciation charges may be included in full under expenses. The regulations do not envisage partial depreciation (this is possible only for real property) – explains Marcin Sobieszek. – You should be, however, careful when accounting for current expenditure, such as fuel purchase. The entrepreneur who deducts invoices for fuel purchased on petrol stations in holiday resorts may have problems with tax authorities. Unless he really has clients in such resorts.

You are welcome to read the article titled “Fiskus łagodniejszy dla firmowych aut”  (Tax authorities less stringent for company cars)  in the electronic issue of the Rzeczpospolita daily which may be found at  - www.prawo.rp.pl.

Answer to the parliamentary question about the amendment of the Goods and Services Tax Act - www.sejm.gov.pl.