Vehicle mileage records - everything you need to know

Service-Tax

From January 1, 2019, entrepreneurs who want to use their private car in their business in order to be able to include expenses related to its use as company costs, no longer have to run mileage allowances for PIT purposes. This obligation was abolished along with the change in the method of accounting for cars used in business activities. Find out how private cars are billed and if and when a vehicle mileage record is required. In the article, we explain in detail the related issues.

Vehicle mileage register 2019 - who should drive and on what basis?

Vehicle mileage records is an issue that is grounded both in terms of income tax and tax on goods and services.

Vehicle mileage record in income tax

Until the end of 2018, vehicle mileage records, commonly known as mileage records, for income tax purposes were mainly kept by entrepreneurs who wanted to include in the costs the expenses related to the use of private passenger cars for the purposes of their business, which are not fixed assets or are not used under a contract leasing, rental, lease.

Therefore, the obligation to keep the records was imposed on entrepreneurs who wanted to recognize as tax deductible expenses incurred due to the use of a passenger car not entered into the register of fixed assets, constituting:

  • private property of the entrepreneur,
  • property of the entrepreneur's employees,
  • property of a third party and is used, for example, on the basis of a rental, lease or lending agreement.

Liquidation of mileage for private entrepreneurs

From January 2019, in the case of private cars of the entrepreneur, a vehicle mileage record is no longer necessary. The entrepreneur is bound by a fixed limit of expenses related to the operation of a private car for business - 20%. This means that in the case of private cars of the entrepreneur, the entrepreneur will deduct only 20% from the invoices for the purchase of fuel, oil or windscreen wiper fluid to the company's costs without the obligation to keep a record of the vehicle mileage.

Vehicle mileage records with employees remain

In the case of employee settlement, the vehicle mileage record and the statutory rate to be settled for 1 km still remain. Thus, employees using private cars for business may still be required to drive mileage allowances for settlement with the entrepreneur.

Liquidation of mileage for rented cars and short-term rental cars

From January 2019, the mileage allowance for cars used in the company on the basis of a lending or short-term rental agreement has also ceased to apply. In this case, the limit of recognizing expenses as business costs is 75%. This means that in the case of cars lent to the entrepreneur, the entrepreneur will deduct 75% from the invoices for the purchase of fuel, oil or wiper fluid from the company's costs without the obligation to keep a record of the vehicle mileage.

New mileage obligation for cars used exclusively in business

The amendment to the PIT Act also introduced the obligation to keep a detailed mileage mileage with data on the vehicle odometer when the entrepreneur wants to recognize 100% of operating expenses incurred in connection with a passenger vehicle used in business as a company's vehicle as a cost of 1 January 2019:

  • constituting a fixed asset,
  • used on the basis of a lease, rental, rental agreement.

Vehicle mileage records for VAT purposes should be kept in order to prove that the vehicle is used only in business, regardless of the VAT status of the entrepreneur. Therefore, in order for the taxpayer exempt from VAT to be able to include 100% of the gross value of the expenditure related to the operation of the vehicle, he must keep a VAT mileage mark for this purpose.

Vehicle mileage records in VAT - remains

Vehicle mileage records are also required by taxpayers who want to deduct 100% VAT on the purchase of a car and operating expenses, including fuel. This applies to vehicles weighing up to 3.5 tons, which are used exclusively for business purposes (e.g. fixed assets or leasing). This exclusivity is determined by the method of using these vehicles by the taxpayer, especially as specified in the rules of their use, additionally confirmed by the vehicle mileage records kept for these cars, which excludes their use for purposes not related to economic activity.

Who is not required to keep records?

If the entrepreneur incurs expenses for the benefit of the employee accounted for as part of a monthly lump sum, there is no obligation to keep records. This provision applies mainly to expenses incurred on behalf of employees for the use of cars by them for the purposes of their activity, for which the cost is not:

  • departure for a business trip (long distance driving) in the amount exceeding the amount determined using the rates for one kilometer of the vehicle mileage,
  • local driving - in the amount exceeding the amount of the monthly lump sum or in the amount exceeding the rates for one kilometer of the vehicle mileage, specified in separate regulations issued by the competent minister.

Keeping records of the vehicle mileage does not apply to entrepreneurs who use trucks over 3.5 tons or less than 3.5 tons but with one row of seats and VAT-1 or VAT-2 - i.e. a certificate of compliance with the technical requirements to be recognized as a truck.

The vehicle mileage record regarding the full deduction of VAT and the full deduction of costs does not need to be kept in the event that:

1.Motor vehicles are designed to carry at least 10 people, including the driver, if the documents issued on the basis of road traffic regulations indicate their intended use,

2.the design of these vehicles precludes their use for non-business purposes or makes their use for non-business purposes irrelevant,

3.The vehicles are exclusively intended for:

a) resale,

b) sales, in the case of vehicles manufactured by the taxpayer,

c) handing over for use on the basis of a rental, lease, leasing or other agreement of a similar nature

- if resale, sale or use of these vehicles for consideration is the subject of the taxpayer's business,

4.with regard to these vehicles:

a) the amounts of input tax on related expenses are calculated by the taxpayer limited to 50%,

b) the taxpayer is not entitled to reduce the amount of tax due by the amount of input tax on related expenses.

The entrepreneur also does not have to keep a record of the vehicle mileage, if he will use a passenger car for the purposes of business activity, but will resign from deducting 100% VAT and deducting 100% of expenses related to the vehicle in company costs.

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What should the vehicle mileage records look like?

What does the entrepreneur's mileage include?

Vehicle mileage records for the purpose of deducting 100% VAT and 100% costs related to the vehicle should include:

  • motor vehicle registration number,
  • day of beginning and ending keeping records,
  • the status of the mileage counter of the motor vehicle on the day of starting the record keeping, at the end of each accounting period and on the day of ending keeping the records,
  • an entry of the person driving a motor vehicle for each use of that vehicle, including:
      1. next entry number,
      2. dates and purpose of departure,
      3. route description (where-to-where),
      4. the number of kilometers traveled,
      5. name and signature of the person driving the vehicle
      6. - confirmed by the taxpayer as to the authenticity of the entry of the person driving the vehicle, if he is not a taxpayer,
  • the number of kilometers traveled at the end of each accounting period and on the date of completion of record keeping.

Convenient mileage management in the wfirma.pl system

Entries regarding mileage of private cars should be entered through EXPENDITURE »KILOMETER» ADD ENTRY. In the new window, complete the details of the trip:

  • select a vehicle from the available list,
  • name and surname of the driver (last choice suggested),
  • date of travel,
  • purpose of the trip (it is advisable to provide as detailed information as possible, e.g. how to get to the customer X - the system remembers previous choices),
  • route - you can choose a predefined route or enter a new one.

Convenience is provided by the ability to define a list of routes.

What is in a mileage of employees?

The PIT Act specifies the minimum data that the vehicle mileage register kept by employees must contain. Is it:

  1. the surname, first name and address of the person using the vehicle;
  2. vehicle registration number and engine capacity (as it determines the applicable rate for 1 km);
  3. description of the route (where from - where to);
  4. consecutive entry number;
  5. date and purpose of departure;
  6. the number of kilometers actually traveled;
  7. the rate for 1 km of mileage;
  8. the amount resulting from the multiplication of the number of kilometers actually traveled by the rate for 1 km;
  9. signature of the taxpayer (employer) and his data.

The current rates for 1 km of the vehicle mileage result from the ordinance of the Minister of Infrastructure of March 25, 2002 and are as follows:

  • for a car with a capacity of up to 900 cm3 - PLN 0.5214;
  • for a car with a capacity of 900 cm3 - PLN 0.8358;
  • for a motorcycle - PLN 0.2302;
  • for a moped - PLN 0.1382.

Vehicle mileage records may be kept in paper and electronic form. In the case of the latter, however, the employee must remember that at the end of the month he should make a printout and sign it.

What is the difference between the calculation of the cost of a private car used in business before and after 2019 in practice?

Expenses for the use of a private passenger car used for the taxpayer's business activities until the end of 2018 were booked at the end of the month in KPIR based on the mileage allowance limits.

From January 2019, the cost should be immediately recognized in the KPIR on the basis of an invoice within a fixed limit of 20%.

Example 1.

    2019

2018

 

Fuel invoice

PLN

Cost posted to KPIR

PLN

Vehicle mileage - limit (km x 0.5214 rate for 1 km)

Monthly vehicle operating costs

PLN

Monthly cost posted to KPIR

Cumulative tax deductible costs

January

100

20

200 x 0.5214 = 104.28

100

100

100

February

210

42

250 x 0.5214 = 130.35

210

134,63

234,63 

March

70

14

150 x 0.5214 = 78.21

70

78,21

312,84

Sum

380

76

312,84

380

312,84 

 -

The costs in 2018 may include the amount of PLN 312.84, while if the same situation occurs in 2019, the cost will be only PLN 76.

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Vehicle mileage logbook 2019 - summary

In the case of private cars, there is no longer a need to drive mileage. On the other hand, the mileage mileage used until the end of 2018 for 100% VAT purposes is additionally used for KPIR purposes, i.e. income tax, but only for passenger cars used exclusively for business purposes. Therefore, the nature of the mileage has changed - until the end of 2018 it was used to settle the cost limit, while from January 2019 it assumed the nature of a document confirming the use of the car only for company purposes. It is therefore used as evidence that the vehicle serves no other purpose.