The right to a full deduction of input VAT, in the case of the purchase of cars used in business activities, is granted only if the car is used exclusively for business activities. If the car is used for mixed purposes (at the same time for business and private use), then half of the VAT due can be deducted.
Individual interpretation of the Director of National Tax Information on 10 September 2018 The signature. S-ILPP1/4512-1-147/15/18-S/TKU it deals with a very detailed issue of parking such cars outside the company.
The company sells specialized economic chemistry in Poland. Therefore, he employs sales representatives both at the seat of the Company (commercial service of the voivodship) and in the country. Sales representatives receive for service the passenger cars they need to work.
In the case of parking of cars outside the company's registered office (near the residence of employees) it is possible to deduct all input VAT
The company has established internal rules according to which employees cannot use cars for private purposes. At the same time, they should park used passenger cars in the company's guarded car parks.
However, there are cases where a representative has to, for example, go to a contractor in the morning and it would not be economically justified for him to go to the company's premises first to get a car and then to the customer, as in practice the cost of fuel would be higher (at the same time, more waste of time).
For this reason, employees sometimes park their cars in their private car parks near their place of residence. At the same time the company meets the registration requirements in the form of e.g. a GPS transmitter mounted in the car (in order to exclude the possibility of private use).
The company wanted to answer the question whether in the case of parking of cars outside the company's registered office (near the place of residence of employees) there is a possibility of deducting the total VAT charged.
The Director of National Tax Information pointed out that:
„the right to reduce the amount of tax due by the amount of input tax when certain conditions are met, i.e. the deduction is made by the taxable person of the tax on goods and services, and when the goods and services from which the acquisition of the input tax has been charged are used to carry out the taxed activities. A condition enabling the taxpayer to exercise the right to deduct input tax is the relationship between purchases and taxed activities carried out."
At the same time, the tax authority considered that driving a worker to work alone constitutes the use of a car for private use, but in this particular case the circumstances justify the conclusion that the taxable person is entitled to a full deduction:
„Having regard to the specific circumstances with which the Company is bound by the consent to park a business car at the employee's place of residence in order to allow the use of this car in commutes to work, and the principles introduced by the Applicant for the use of these cars (e.g. vehicle records, GPS system, the obligation to park cars in closed guarded or guarded parking lots (...) The company is entitled to a full VAT deduction when purchasing passenger cars."