Passenger car leasing - everything you want to know

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Entrepreneurs try to include as much of their expenses as possible as company costs. Can the leasing of a passenger car be classified as tax deductible costs? Check the tax consequences of car leasing.

Operating lease of a passenger car

A car used under the operating lease cannot be included in the fixed assets of the entrepreneur, and thus is not subject to depreciation. For the duration of the operating lease, the leasing company owns the car, which is why it makes depreciation write-offs of the vehicle.

Costs related to the day-to-day use of a leasing vehicle - such as fuel, car wash, highway tolls or repair costs - are included by the entrepreneur directly in tax costs. It is also worth emphasizing that in order to settle these costs, the entrepreneur is not required to keep mileage allowances for income tax purposes.

Costs also include leasing installments and initial rent (initial payment). VAT is added and paid pro rata with each of these fees.

After the end of the term of the contract, the lessee has the right to buy out the used item.

Financial leasing of a passenger car

In the case of this form of car leasing, the entrepreneur may include only the interest part of the installment as tax costs, provided that it has been paid. It is also important that in the case of financial leasing, VAT must be paid on the entire transaction, at the very beginning. Therefore, it will not be VAT charged only on the initial rent, but on all payments over the entire lease period - in advance.

Moreover, unlike operating leasing, the lessee has the right to depreciate the vehicle.

The most common methods are linear and individual depreciation.

  • Linear depreciation - the rate is 20% and results from the annex to the PIT Act. With this depreciation method, the vehicle will be depreciated over 5 years.

  • Individual depreciation - it is used in the case of used cars. A used car is a vehicle that has previously been used by a person other than the taxpayer for at least 6 months. This rate also applies to improved vehicles. A car is considered such a car for which at least 20% of its initial value was incurred before being entered into the register. The maximum depreciation rate is 40% per annum. This allows the amortization period to be shortened to 2.5 years.

When selecting the depreciation methods for a passenger car, the following cannot be used:

  • declining depreciation with a factor of 2.0;
  • one-off depreciation (from de minimis aid).

Expenses related to the day-to-day use of the vehicle, i.e. purchase of fuel, repairs or a car wash, can be directly included in company costs.

Passenger car leasing - financial or operational

Operating lease of a passenger car

Financial leasing of a passenger car

  1. costs include leasing fees, installments, etc. (for passenger cars with a value not exceeding PLN 150,000, the entire net value of the leasing installment will go to company costs),

  1. costs include only the interest part of the leasing installments,

  1. is amortized by the financing party (leasing company),

  1. amortized by the user (for passenger cars with a value not exceeding PLN 150,000, all depreciation charges will go to company costs),

  1. operating costs are included in tax deductible costs,

  1. operating costs are included in tax deductible costs,


  1. non-company vehicle


  1. company vehicle.

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Car leasing and VAT

Leasing a passenger car gives two possibilities of VAT deduction: full or partial (50%), it depends on the way the vehicle is used.

If the car will be used only for business purposes, it is possible to deduct 100% VAT on leasing installments, fuel purchases or other expenses related to its use, but under certain conditions. When declaring the use of a passenger car only for business purposes, it is necessary to:

  • reporting the vehicle to the Tax Office on the VAT-26 form,

  • keeping vehicle mileage records for VAT purposes,

  • drawing up the regulations for the use of the vehicle.

On the other hand, if the vehicle will be used in a mixed manner, i.e. both for business and private purposes, only a 50% deduction of VAT is possible. The partial deduction of VAT applies to both leasing installments and other expenses related to the current use of the vehicle (including the purchase of fuel).