Costs linked to business use of passenger cars

Starting from 2019 the limit of tax depreciation write-offs applicable to passenger cars will be increased to PLN 225,000 for electric cars and PLN 150,000 for diesel and hybrid cars (at present the limit is EUR 20 000). The above limits include the amount of VAT that is not allowed for deduction under the VAT regulations.

What’s more, if the passenger car will be used for mixed purposes (business and non-business) then only 75% of expenses (e.g. service, fuel, repairs) will be allowed for tax deduction. However, the taxpayer will still be entitled to deduct 100% of expenses when the car will be used for business purposes only and a mileage logbook will be held (same one as for VAT purposes). In the case of using a private car for business activity, when the car will not be included in the fixed assets register, only 20% of expenses will be allowed for tax.

The above limits of tax depreciation write-offs will also apply to passenger cars subject to lease and rental (currently no limits). In the case the lease instalments will also include maintenance costs, tire replacement, etc. this part of instalment will also be subject to the 75% limit regarding exploitation costs.