Failure to register the car in the company for VAT-26 - what are the consequences?

Service-Tax

Entrepreneurs have already got used to the changes in the car regulations in the company, which entered into force at the beginning of April 2014. However, there may still be those who forget about fulfilling new obligations - e.g. about submitting the VAT-26 form. What are the consequences for entrepreneurs for not reporting the car to the office? Check!

Reporting the vehicle to VAT-26 is an obligation

Currently, entrepreneurs have the option of fully deducting VAT on car expenses in the company. However, in order to be able to exercise this right, the vehicle must only be used for business purposes. Pursuant to the VAT Act, the use of a vehicle only for business purposes takes place when:

  • the design of the vehicle precludes its use for non-business purposes or makes its use for non-business purposes irrelevant,

  • the manner of its use by the taxpayer, in particular those specified in the rules of use established by him, additionally confirmed by the vehicle mileage records kept by the taxpayer for these vehicles, excludes its use for purposes not related to economic activity.

Referring to the second of the indicated points, in order to deduct 100% VAT on the purchase of the vehicle, fuel and other expenses, the taxpayer must meet the following conditions:

  • submit the vehicle to VAT-26,
  • define in a clear and understandable way (e.g. in the form of regulations) the rules of using the car,
  • lead a mileage test for VAT purposes.

Important!

Entrepreneurs who use cars in the company, for which they are required to keep a VAT mileage register, are required to submit information about these vehicles to the head of the tax office using the VAT-26 form. Pursuant to Art. 86a paragraph 12 of the VAT Act, the taxpayer has 7 days from the date of incurring the first expenditure related to these vehicles.

Failure to register the vehicle for VAT-26 on time - consequences

Importantly, the act that amends the VAT Act also introduces certain changes to the Fiscal Penal Code. The novelty here is Art. 56a, referring directly to issues related to vehicles and their reporting in the US.

Important!

Entrepreneurs should keep an eye on the deadline for submitting VAT-26, because if they want to deduct 100% VAT, but fail to meet the indicated obligation on time, they will be able to deduct only 50%. the VAT amount from the document confirming the incurred cost. If the application is submitted after the deadline, it is possible to fully deduct VAT only from the day the information is delivered to the office.

Entrepreneurs who, against the obligation, do not submit VAT-26 to the competent tax authority or submit it late or provide it with data inconsistent with the actual state, deducting the tax contrary to the provisions of the VAT Act, are subject to a fine of up to 720 daily rates.

If the act is less serious, the perpetrator is liable to a fine for a tax offense.

It should be noted that pursuant to Art. 56a of the Act of September 10, 1999, Fiscal Penal Code, the taxpayer who submitted the VAT-26 information after the deadline, if the submission of this information took place before:

  1. commencement of verification activities in the field of tax on goods and services,
  2. delivery of a notification of the intention to initiate a tax inspection or inspection proceedings as part of a tax inspection in the field of tax on goods and services, and in the event that the notification does not apply - before the date of initiation of such inspection or procedure, if the case indicated in point 1 did not take place,
  3. initiation of tax proceedings in the field of tax on goods and services, if the case indicated in point 1 or 2 did not take place.