According to the judgment of the Provincial Administrative Court in Opole, 6 May 2016, reference no. I SA/Op 68/16 employees using business cars for private purposes do not have to pay the fuel value tax paid free of charge by the employer.
However, the content of that provision does not explain whether the tax liability of the employee for the use of a business car for private purposes applies only to the amount indicated therein or should be extended to the value of the fuel obtained free of charge from the employer.
Act dated 26 July 1991 on personal income tax (Journal of Laws of 1991, item 350 as amended, Further : PIT Act) recognises as taxable income not only basic salaries, overtime salaries, various allowances, prizes and allowances for unused leave but also the value of unpaid benefits received from the employer. Where a business car is used for private purposes, the amount increasing the tax base shall be fixed on a flat-rate basis.
According to Article 12(2a) The PIT act determines the monetary value of the free service car benefit for private use by the employee:
- • 250 PLN per month – for cars with engine capacity up to 1600 cm3;
- • 400 PLN per month – for cars with engine capacity above 1600 cm3.
However, the content of that provision does not explain whether the tax liability of the employee for the use of a business car for private purposes applies only to the amount indicated therein or should be extended to the value of the fuel obtained free of charge from the employer.
This issue was settled in favour of the taxpayer by a judgment of the Provincial Administrative Court in Opole. According to this ruling, the value of fuel obtained free of charge from the employer does not increase the tax base when using a business car for private purposes.