Excise tax on cars rented abroad and coming to Poland and the possibility of its recovery.
Passenger cars rented in another Member State and used for the purpose of business activity on the territory of Poland are subject to excise tax. The tax obligation arises regardless of duration of the movement of the car. Such position has been recently confirmed by Director of the National Fiscal Information in the individual binding ruling of 2 July 2018 (ref. no. 0111-KDIB3-3.4013.102.2018.1.JS).
Pursuant to the Act on Excise Tax, an intra-Community acquisition of a passenger car that has not been previously registered on the Polish territory shall be subject to excise tax. Within the meaning of the Act, an intra-Community acquisition of vehicles will be every physical movement of a car from the territory of Member States to the Polish territory.
According to Article 101 of the Act on Excise Tax, the tax obligation in connection with an intra-Community acquisition of vehicles arises as of:
- the movement of a passenger car from the territory of a Member State to the Polish territory – if the right to make disposition of the car like the owner was acquired before the movement of the car to the Polish territory;
- the acquisition of the right to make disposition of a passenger car like the owner – if the right to make disposition of the car like the owner was acquired after the movement of the car to the Polish territory;
- the submission of an application to register a passenger car on the Polish territory in accordance with traffic regulations – if the entity applying for registration of a passenger car being the object of an intra-Community acquisition is not the owner of the car.
But in the case of car rental the point of issue is not the right of ownership but the actual possibility to make disposition of the car. The tax authorities emphasise that in such circumstances the renter is obligated to pay excise tax upon conclusion of the rental agreement.
In addition, in the above binding ruling Director of the National Fiscal Information for the first time addressed the issue of the possibility to apply for the recovery of tax. Namely in accordance with Article 107 of the Act, upon the conclusion of the agreement and the movement of the vehicle back to the territory of a Member State, the renter has the right to apply for the recovery of tax. The taxpayer applying for the recovery of excise tax has to submit an application to a competent tax authority together with evidence of payment of excise tax and an invoice or another document confirming an intra-Community supply. However, it is worth noting that the car must physically leave the Polish territory as leaving it in a Polish branch of the rental company will not trigger legal effects allowing the recovery of the paid tax.
Kinga Duszna, Tax Consultant, ATA Tax Sp. z o.o.
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