CB radio in tax costs - is it possible?
One of the essential equipment of every professional driver is a CB radio. It helps not only to avoid traffic jams and renovations on the roads, but also allows you to plan your route in the event of unexpected traffic incidents. Communication between drivers certainly improves travel between cities, but can the entrepreneur include the invoice for CB radio in the costs? If he purchased an item for a company car, can he also deduct VAT? Answer below.
CB radio in tax deductible expenses
When considering the validity of recognizing the cost of purchasing CB radio as a cost, one should start with the definition of tax deductible costs specified in the PIT Act. Pursuant to Art. 22 sec. 1, expenses that meet the following three conditions jointly can be considered a tax cost:
- remain in a cause-and-effect relationship with the income or source of income and are incurred in order to achieve income or to preserve or secure its source,
- are not on the list of costs not recognized as tax deductible costs referred to in article 1. 23 above acts,
- are properly documented.
Can the expenditure on CB radio be included in costs in accordance with the above definition? Yes, if it was incurred for the purposes of the conducted business activity. In other words, the expenditure will not be questioned by the tax authorities if the item was purchased for use during the trip with a company car - entered in the company's fixed assets register. CB radio as a tool for communication between drivers, with a range of up to several kilometers, helps to predict road conditions. Users provide each other with a lot of important information on the condition of roads, repairs, or even weather conditions. This can significantly affect the efficiency and speed of travel, which will certainly contribute to increasing revenues from business activities.
A similar position was taken by the Director of the Tax Chamber in Katowice in the individual ruling of April 11, 2011 (reference number IBPBI / 1 / 423-9 / 11 / RM) regarding the acquisition of CB radio by the applicant for employees to improve their work while traveling. He stated that: “According to the description of the future event presented in the application, the purchase of CB radio will allow Sales Managers to communicate with other Managers in terms of road conditions, works, detours, congestion and weather conditions. CB radio will also be useful to call the appropriate emergency services in the event of a collision or other emergency. It follows from the above that the purchase of CB radio will be incurred in order to improve the work of the company's employees (their movement), which at the same time may translate into more effective income for the Applicant by improving the timeliness of tasks performed by the Applicant's employees, increasing the efficiency of time spent on a business trip, or reducing the cost of these trips.
In connection with the above, it should be stated that the expenses incurred for the purchase of a CB radio for employees performing business trips to institutions located throughout the country, may be included in the tax deductible costs of the business conducted by the Applicant. "
However, incurring a similar expense and its cause and effect relationship with the achievement of income should be considered individually each time. It must be clear from objective considerations whether incurring the expense for the purchase of CB radio actually contributes to the income or not. This issue depends mainly on the type of business, and taxpayers should remember that they are responsible for justifying the relationship between the cost and the income earned.
In most cases, the purchase of a CB radio does not exceed PLN 3,500, so the taxpayer may recognize the expense as a one-off tax deductible cost by posting it to column 13 of the KPiR - "Other expenses". However, if the value exceeds the aforementioned amount, it will be necessary to enter the device in the company's fixed asset register. Importantly, buying a CB radio before introducing the vehicle in which it will be used for records - its purchase price will increase the initial value of the car.
Since we already know that it is possible to include the expenditure on CB radio in costs, the issue of VAT settlement remains. In the case of VAT settlements charged on the purchase of CB radio, the situation is similar. If the taxpayer uses the device in a car that is used to perform VAT-taxed activities, then he has the right to deduct the amount of tax shown on the proof of purchase.