Motorcycle and moped - VAT deduction

Service-Tax

In their business activities, entrepreneurs decide to use not only passenger cars, but also motorcycles and mopeds. Due to the detailed changes to the regulations regarding the right to deduct VAT on motor vehicles, it is worth knowing what technical conditions must be met by the two-wheelers.

According to the Classification of Fixed Assets, all motor vehicles are included in subgroup 74, which also include - "motorcycles, trailers and motorcycling carts". This genus was marked with the symbol 740 and includes:

  • motorcycles and scooters, including passenger trailers,
  • motorcycles and freight rickshaws, including truck trailers.

The category does not, however, include motor vehicles for handling, ie warehouse or platform trucks (subgroup 76).

Motorcycle and moped

Regulations concerning the definition of motorcycles and mopeds, as well as the technical conditions that should be met, were included in the Act of June 20, 1997 - Road Traffic Law. According to Art. 2 points 45 and 46:

  • motorcycle - a motor vehicle equipped with an internal combustion engine with a cylinder capacity exceeding 50 cm3, two-wheeled or with a sidecar - multi-track (this term also includes a three-wheeled vehicle with a symmetrical arrangement of wheels),
  • moped - a two- or three-wheeled vehicle equipped with an internal combustion engine with a cylinder capacity not exceeding 50 cm3 or with an electric motor with a power not exceeding 4 kW, the structure of which limits the speed to 45 km / h.

Thus, as can be seen from the cited explanations, a motorcycle is a motor vehicle also within the meaning of the VAT Act (Article 2 point 34), while a moped is not. It depends on this issue whether the taxpayer will have the full right to deduct VAT on the purchase of a two-wheeler and the expenses related to its operation.

A taxpayer who has purchased a moped for business purposes has an unlimited right to deduct VAT on both the acquisition and operating expenses, as it is not a motor vehicle within the meaning of the VAT Act.

VAT deduction on motorcycles

Pursuant to the Act of February 7, 2014 amending the Act on tax on goods and services and certain other acts, taxpayers until June 30, 2015 are not entitled to deduct VAT on the purchase of motor fuels, diesel oils and gas, for propulsion:

  • passenger cars,
  • motor vehicles (other than passenger cars) with a maximum permissible weight not exceeding 3.5 tonnes, in which the number of seats (seats), including the driver's seat, is:

a) 1 - if the maximum load capacity is less than 425 kg,

b) 2 - if the maximum load capacity is less than 493 kg,

c) 3 or more - if the maximum load capacity is less than 500 kg.

Online Tips

Do you run a company and have questions?

Take advantage of the expert advice of the Entrepreneur's Guide

Online advice for businesses

Motorcycles are also included in the range of motor vehicles with a gross vehicle weight below 3.5 tonnes. It is worth mentioning, however, that this restriction does not apply to motor vehicles (including passenger cars) used exclusively for business purposes.