An entrepreneur who purchased a car abroad with a value exceeding 15,000 PLN, except for the bank account, it will not be able to include expenditure on this account in the cost of obtaining revenues in its business.
In one of the latest interpretation of tax law issued by the Director of National Tax Information we learn that an entrepreneur who bought a car with a value exceeding 15,000 PLN and financed this purchase in cash will not be able to include this expenditure in the cost of obtaining revenue even if the car is necessary for its business. In Polish tax law from 1 January 2017 a limit of 15,000 PLN after exceeding which the trader loses his right to settle in the cost of running the expenditure financed by cash.
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On 30 December 2019 The Director of National Tax Information issued an individual interpretation on personal income tax in terms of revenue costs. The taxpayer indicated in his application that he was engaged in an economic activity taxed on a general basis. The applicant also stressed that he had gone to Germany to quickly acquire the vehicle he needed for his business. The German company from which the applicant purchased the car had a NIP number and did not see any obstacles to the cash transaction.
Thus, the applicant paid for the car in cash a sum of 5,500 EUR, or 23,874.95 PLN. However, the applicant was not aware that the Polish legislation provided that such a car purchase transaction would not constitute its cost of obtaining revenue.
In his application to the Director of the CIS, the taxpayer stressed that this car is necessary for his business activity and that any costs associated with it should be the cost of obtaining income.
Therefore, according to the applicant, the amount of the transaction should not matter here and the method of payment should not disqualify the possibility of buying a fixed asset abroad.
According to the applicant the purchase of the car for 23,874.95 PLN the cost of obtaining income and any expenditure relating thereto should be deducted.
However, the applicant’s position was not agreed by the Director of the CIS, indicating that, in view of the facts presented, it must be concluded that the purchase of the car was carried out between traders and that the application in this case would find Article 22p Act dated 26 July 1991 on personal income tax (Journal of Laws of 1991, item 350). According to the Director of KIS, the payment should be made via a payment account.
Based on the interpretation dated 30 December 2019 o reference no.: 0115-KDIT3.4011.356.2019.3.DR
Author: Paweł Boś
Junior Tax Consultant, related to Russell Bedford Poland 2018. Author of numerous articles on legal and tax matters, published in the industry press. Law student at Leon Kozminski Academy in Warsaw.