VAT 2014 – car for business and private use – possibility to deduct 50% of VAT

Starting from April 1st 2014 the car used for business and private purposes will be able to deduct 50% of VAT.

The primary purpose of the amendment is comprehensive regulation by the provisions of the tax on goods and services the rules for deducting expenses relating to cars and other motor vehicles with GVW up to 3.5 tones. The act is to implement the European Union law, and the direct basis for the introduction provided in the content of the amendments is a Council Implementing Decision of December 17th 2013 authorizing the Republic of Poland to apply measures derogating from Article 26. Point 1, point a and art. 168 of Directive 2006/112/EC on the common system of value added tax (Dz. Urz. UE L 353 z 28.12.2013, page. 51).


According to 2013/805/UE Poland was authorized to limit, up to 50%, the right to deduct VAT on the purchase, intra-Community acquisition, importation, lease or rental of motorized vehicles, as well as the VAT charged on expenses associated with these vehicles, if vehicle is not used exclusively for business. The above limitation shall not apply to motor vehicles the permissible laden weight of 3500 kg or vehicles that have more than nine seats including the driver’s seat, as well as the VAT paid on expenses, which are all related to the business of the taxpayer. In addition, Poland has been authorized to not to treat as a supply of services the use of the vehicle for which the above limitation shall apply for purposes other than those of business activity.