Vehicle mileage records - worth knowing

Service-Tax

Entrepreneurs often use their private passenger car in their business activities. They incur various types of expenses, such as fuel, inspections, services, toll motorway travel, purchase of parts and other car items, etc. has changed. Check when and how the logbook of the vehicle mileage should be kept!

Vehicle mileage records - obligation to keep in 2019

The obligation to keep a record of the vehicle mileage may result both from the provisions of the VAT Act and the provisions of the Income Tax Act.Therefore, it is worth checking when in practice you should drive a mileage mark.

Liquidation of mileage for private entrepreneurs

The vehicle mileage record was required to settle the expenses related to the operation of a passenger car in tax costs, which was not entered into the register of fixed assets, which was valid until the end of 2018. From January 2019, this obligation was abolished in favor of a fixed limit of costs related to the operation of a private car used in business, which was set at 20%.

VAT vehicle mileage records increases its importance

Entrepreneurs using passenger cars, motorcycles or trucks below 3.5 tons with more than one row of seats, who use the car only for their business in order to deduct 100% VAT and 100% of costs in the KPiR must keep a detailed mileage allowance.

Vehicle mileage records should include:

1) the registration number of the motor vehicle;

2) the start and end date of keeping the records;

3) the odometer reading of the motor vehicle on the day of the start of keeping the records, at the end of each accounting period and on the day of the end of keeping the records;

4) entry of the person driving the motor vehicle regarding each use of this vehicle, including:

a) consecutive number of the entry,

b) date and purpose of departure,

c) description of the route (from where - where to),

d) the number of kilometers traveled,

e) name and surname of the person driving the vehicle,

- confirmed by the taxpayer at the end of each tax period in terms of the authenticity of the entry of the person driving the vehicle, if he is not a taxpayer;

5) the number of kilometers traveled at the end of each accounting period and on the day of ending keeping the records.

Printing the entrepreneur's vehicle mileage records

A convenient solution when keeping mileage is the use of online accounting systems that allow you to keep a record of vehicle mileage online with the option of printing it at the end of the month.

In the wfirma.pl system, the vehicle mileage record is available in the EXPENSES »KILOMETER» KILOMETER tab. You can print it from here by selecting the option PRINT »VAT RECORDS.

A kilometer for the settlement of employees - still valid

When an employee uses his private car in the company, the vehicle mileage record, converted at the statutory rate per 1 km, is still applied. The mileage rates for settlements with employees have not changed in relation to the previous years and depend on the type of means of transport used.

1. Rate for 1 km of vehicle mileage for a passenger car:

  • with an engine capacity of up to 900 cm3 - PLN 0.5214,

  • with an engine capacity of more than 900 cm3 - PLN 0.8358.

2. The rate for 1 km of vehicle mileage for a motorcycle - PLN 0.2302.

3. The rate for 1 km of vehicle mileage for a moped - PLN 0.1382.

The difference in the settlement of private cars until 2018 and from 2019 on the basis of PIT

Example for the settlement for 2018

In October 2018, the entrepreneur started using his private passenger car with a capacity of 1800 cm3, which is not a fixed asset. At that time, in order to account for operating costs related to it, a register of the vehicle's mileage had to be kept.


Month

Cost limit

Expenses based on fuel invoices

Cost in KPiR 2018

in a month

cumulatively

in a month

cumulatively

a month

cumulatively

October 2018

83.58 PLN

83.58 PLN

PLN 115

PLN 115

83.58 PLN

83.58 PLN

November 2018

PLN 125.37

PLN 208.95

PLN 80

PLN 195

PLN 111.42

PLN 195

December 2018

PLN 100.30

PLN 309.25

PLN 180

PLN 375

PLN 114.25

PLN 309.25

Let's compare how the settlement of this car would look like in 2018 and in 2019?

Example for the settlement for 2019


Month

Expenses based on fuel invoices

Cost in KPiR 2019

in a month

cumulatively

per month - limit of 20%

cumulatively - the limit of 20%

January 2019

PLN 115

PLN 115

PLN 23

PLN 23

February 2019

PLN 80

PLN 195

PLN 16

PLN 39

March 2019

PLN 180

PLN 375

PLN 36

PLN 75

Therefore, in the case of private cars, additionally used in business, the changes introducing from January 2019 the limit of 20% for operating costs mean that the entrepreneur will be able to include as costs less than before the amount of expenses for fuel or other operating expenses, such as a car wash, purchase of accessories or minor repairs.

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What expenses related to private cars used in the business can be counted as costs?

The costs subject to the 20% limit in income tax related to the use of a private car additionally in business, for example, include:

  • fuel,
  • parking fees and highway tolls,
  • car wash, cleaning products,
  • maintenance services and ongoing repairs,
  • replacement of consumable spare parts, e.g. bulbs, tires,
  • insurance policy.

Expenses improving the private car excluded from the costs

Expenses improving a private car, which the entrepreneur uses in his business, do not constitute a tax deductible cost, because they are not related to its day-to-day operation. An example is the cost of installing a gas installation or a navigation device.

Confirmation of this position is the answer of the Tax Office Poznań-Jeżyce of September 1, 2005 (reference number SD / 415-47 / 05) to the taxpayer's inquiry regarding the possibility of including the purchase and installation of a gas installation in a private car:

(...) The term "use" includes expenses related to day-to-day operation (fuel, including gas, oils, spare parts, maintenance and minor repairs), parking fees, etc. Installing a gas system in a private car does not is located in the above-mentioned concepts. It is neither a minor repair nor a renovation. It is a modernization of the car engine power supply system. Thus, there are no grounds for including the cost of installing a gas installation in a passenger car as tax deductible costs, as it does not constitute an expense related to the current use of the car.

The limit of 20% of expenses related to a private entrepreneur's car - net or gross amounts?

Let us remind you that taxpayers may deduct VAT in the amount of 50% of the tax amount shown on the invoice from expenses related to passenger cars used for both business and private purposes. It is worth adding that it does not matter whether the car is classified as fixed assets or is accounted for under the 20% limit.

Example 1.

An entrepreneur who is an active VAT payer uses a private car for business. In January 2019, he received an invoice for the purchase of fuel in the amount of PLN 100 net + 23% VAT. How will I book this invoice in the KPiR and in the VAT register?

VAT purchase register: the deduction is subject to 50% of the VAT value from the invoice, i.e. the entrepreneur will deduct PLN 11.50 in the VAT purchase register.

KPiR: 20% x (100 + PLN 11.50) = PLN 22.30 - the entrepreneur will include this cost amount in column 13 for other expenses in the KPiR.

Example 2.

An entrepreneur benefiting from a VAT exemption uses a private car for business. In January 2019, he received an invoice for the purchase of fuel in the amount of PLN 100 net + 23% VAT. How will I book this invoice in KPiR?

VAT purchase register: the entrepreneur is exempt from VAT, hence he does not make any entries in the VAT register.

KPiR: 20% x 123 PLN = 24.60 PLN - the entrepreneur will include this cost amount in column 13 for other expenses in the KPiR.

Reimbursement of the employee's business trip expenses in his private car

The means of transport appropriate for a business trip are determined by the employer. At the request of the employee, the employer may consent to travel by a passenger car not owned by the employer. In this case, the vehicle mileage record is still in force, and the employee is entitled to a reimbursement of travel costs in the amount of the product of the kilometers traveled and the rate per kilometer.

Also, when traveling abroad, the employer may agree to travel by car not owned by the employer. The reimbursement of travel costs is also based on the calculated mileage limit.

The taxpayer may include as tax deductible costs the documented expenses reimbursed to employees, incurred for his needs during a business trip - up to the amount not higher than the amount resulting from the mileage limit. The employer may decide to reimburse the employee for expenses in excess of the amount resulting from the vehicle mileage record, however, he must remember that the excess will not be considered a tax expense.