Penalties for failure to report the car to the tax office on VAT-26
At the beginning of April 2014, the Act amending the Act on VAT and certain other acts of February 7, 2014 on motor vehicles entered into force. The changes contained therein resulted from the derogation decision approved by the European Commission. Poland, unlike other countries belonging to the European Union, has obtained permission to apply slightly different regulations regarding the deduction of VAT on expenses related to the purchase and operation of vehicles. Below we present significant changes in this regard, such as the obligation to report the car to the tax office on VAT-26.
Reporting the car to the Tax Office is obligatory
The taxpayer has the option of fully deducting VAT from expenses on motor vehicles. However, in order to exercise this right, the vehicle must only be used for business purposes. Pursuant to the Act, the use of a vehicle only for business purposes takes place when:
1.the structure of the vehicle precludes its use for purposes other than those related to business activity, or the use of the vehicle for purposes other than those related to business activities is irrelevant;
2.the way they are used by the taxpayer, especially 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 their use for purposes not related to economic activity.
Referring to the second of the above-mentioned points, in order to deduct 100% VAT on the purchase of a vehicle, fuel or other expenses, the taxpayer must meet the following requirements:
- report the vehicle to the Tax Office on the VAT-26 form;
- define clearly and understandably - e.g. in the form of regulations - the rules of using the car;
- lead a mileage test for VAT purposes.
Taxpayers who use motor vehicles only for business activities, for which they are required to keep a record of the vehicle mileage, are required to submit information about these vehicles to the head of the tax office by means of a VAT-26 form. Pursuant to Art. 86a paragraph 12 of the amended VAT Act, the taxpayer has 7 days from the date of incurring the first expenditure related to these vehicles.
Failure to submit VAT-26 on time - consequences
It should be remembered that the Act of February 7, 2014 amending the Act on VAT and certain other acts also introduces in the Penal and Fiscal Code. The novelty is Art. 56a, relating directly to issues relating to vehicles and their reporting to the tax office.
You should absolutely observe the deadline for submitting the VAT-26 declaration for vehicles below 3.5 tons. If the taxpayer wants to deduct 100% VAT, but fails to do so on time, it will be possible to deduct only 50% of the VAT amount - resulting from the document confirming incurring the 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.
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Online advice for businessesA taxpayer who, contrary to his obligation, does not submit VAT-26 to the competent tax authority (in accordance with Article 86a (12) of the VAT Act) or submits it late or provides data that is inconsistent with the actual state of it, deducting the tax contrary to the provisions on tax on goods and services, is punishable by a fine of up to 720 daily rates.
In the event of a minor offense, the perpetrator of this act is subject to a fine for a tax offense.
Pursuant to Art. 86a paragraph 12 of the VAT Act, a taxpayer who submitted the VAT-26 information after the deadline is not subject to penalty in a situation where the submission of this information took place before:
- commencement of verification activities in the field of tax on goods and services;
- delivery of a notice of 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;
- 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.
Check how to fill in VAT-26 - download a free formula with an overview!