Since the new year, we are looking forward to changes in the PIT Act, which are related to the possibility of including in the costs of obtaining revenues of expenses incurred in connection with the use of passenger cars in the company.
On the website of the Government Legislative Centre, a modified bill dated 25 September 2018 amending the Personal Income Tax Act, the Corporate Income Tax Act and certain other laws. It provides for a number of changes to the PIT Act in connection with the use of cars in business.
Resigning a mile
first of the changes is the total resignation of the legislator from the accounting of expenses so-called kilometres, which applied to cars used in the economic activity of the taxpayer but not a permanent measure. Amended Article 23(1)(46) The PIT Act provides that expenditure relating to cars owned by the taxpayer and not included in fixed assets may constitute the cost of obtaining revenue up to the limit of 20%.
Increase of the depreciation value limit
Another change is to increase the limit on the value of the car from which depreciation is not the cost of obtaining income. Currently, this limit was 30,000 EUR for electric cars and 20,000 EUR for the others. The bill assumes that since January 2019 the values would be respectively 225,000 PLN and 150,000,000 PLN.
These limits will also apply to contributions to passenger car insurance, which, in the event of exceeding the above thresholds, should be included in the tax costs proportionately.
In this respect, the project also provides for an appropriate extension of the limitation currently applied to depreciation for the use of a passenger car for other forms of use of a passenger car under a lease, lease, lease and other similar contract.
The reduction in the inclusion of fees for these contracts in tax costs will be determined by the proportion of the value of the leased car.
Deductions dependent on use
The amendments will also cover expenditure on passenger cars which are fixed assets in the business of taxpayers. Currently, such expenditure can be a revenue basket in its entirety, regardless of whether the car is used in the company solely for business or private purposes.
The legislator did not impose significant restrictions on this matter. From 1 January 2019 The situation of taxpayers is expected to change substantially.
The Ministry of Finance planned that, as in the case of the Goods and Services Tax Act – 100% expenditure can only be classified as tax costs when using cars solely for business purposes. The use of the car for mixed purposes was to result in a cost credit only 50% expenditure.
Finally, in the draft ministry, the taxpayer decided that in such a situation the taxpayer would be able to consider the tax cost 75% expenditure incurred.
This limit will also apply to VAT which, in accordance with the separate provisions, does not constitute input tax and input tax, in the part where it is not deductible from due or recoverable tax. At the same time, the revised rules plan to use VAT records to determine the scope of the use of the car for income tax purposes.
Where the taxable person does not keep the records referred to in Article 86a The Goods and Services Tax Act (vehicle history) is considered to be used also for purposes not related to the economic activity of the taxable person, unless the VAT Act exempts him from the obligation to keep such records.
For taxable persons who do not comply with the applicable limit, the legislator provides for sanctions in the form of the application of this amendment from the date on which the taxable person starts using the passenger car in question, i.e. on a retroactive date.
The amendments are to apply from 1 January 2019
Author:
Marcin Kołkowicz
Tax advisor, tax consultant at Russell Bedford Poland Sp. z o.o., graduate of the Administration, Management and Marketing of the Catholic University of Lublin named after John Paul II. The subject of tax law deals with from 2012. He gained experience in Lublin and in Warsaw tax advisory offices. Author and co-author of many tax publications, in particular for Tax and Tax Portal TaxFin.pl. In his career, he dealt with both direct and indirect taxation issues, with particular emphasis on VAT.