Renting a passenger car from abroad entails obligations in excise duty
In a private tax ruling issued on July 1, 2019, the Head of the National Revenue Information Service confirms that leasing or renting passenger cars outside of the Republic of Poland, which, however, are also used in Poland for more than 30 days, constitutes intra-Community acquisition of goods, which consequently entails the obligation to settle excise duty in Poland.
The tax ruling was issued with reference to the use of passenger cars on the territory of Poland that were rented or leased in the Czech Republic. A Czech company, conducting construction works in Poland used these vehicles for the purposes of investments in different countries. In this case, its employees could use the cars to travel between the territory of Poland, where the investment works were carried out, and the territory of the Czech Republic, where the Czech company is based. During the whole period of their use, the vehicles remained the property of foreign lessors, were registered in the Czech Republic, and the users having the option of buying out the cars after the period of use had never used this option. The vehicles were always returned to the lessor.
The entity applying for the tax ruling indicated that it was crucial in the case at issue to determine whether or not the transfer of a rented or leased passenger car to the territory of the country resulted in the taxpayer acquiring a right to dispose of the vehicle as an owner. Only such a movement of a passenger car from another Member State to Poland constitutes intra-Community acquisition, which results in the obligation to charge and pay excise duty. In the case in question, in the applicant’s opinion, such a situation did not take place, therefore the excise duty did not arise.
Do you rent a car? You will pay excise duty
Relying on de facto identical provisions of Excise Duty Act, the Head of the National Revenue Information Service arrived at the conclusion that in the case under consideration, in connection with intra-Community acquisition of passenger cars, the company also acquired the right to dispose of the vehicles as an owner, which resulted in the obligation to charge and pay excise duty.
It should be indicated that the pro-fiscal argumentation presented in the above tax ruling, contrary to the judgments of administrative courts, is already well-established and the consequences of such a position will be borne by businesses.
How to obtain a refund
In this particular case, the Czech taxpayer after returning the vehicles to the lessor could apply for a refund of the excise duty. To that end, an application would be required to be submitted to the head of the Tax Office within one year of cars being exported to the Czech Republic. The application must be accompanied by documents confirming the payment of excise duty and the transfer of the goods outside the country.
Agnieszka Jasica-Skalbmierska, Tax Advisor, ATA Tax Sp. z o.o.
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