Renting a car and mileage - how to correctly calculate it?

Service-Tax

Do you rent a passenger car for a company? Find out how to properly account for car rental - as part of mileage allowance or directly in tax deductible costs.

Vehicle mileage record in 2017

Expenditure on the operation of passenger cars that are not fixed assets in the company is limited by the so-called mileage, that is, a record of the vehicle's mileage. The entrepreneur may include the expenses related to the use of the vehicle as tax costs. However, only up to the value resulting from the multiplication of the number of kilometers of the actual mileage of the vehicle for the purposes of the business by the rate for one kilometer. In 2017, the rate for 1 kilometer for a passenger car will be:

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

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

Mileage accounts for expenses related to the day-to-day operation of the vehicle, such as fuel, minor repairs or the purchase of fluids. You can keep a vehicle mileage record on your own, but it is worth using online mileage accounting programs.

For the last two years, there has been a dispute as to whether expenses relating to rent for a passenger car should be accounted for within the mileage limit. Currently, this issue does not raise the slightest doubt.

Car rental - how to settle the rent?

Companies that rent passenger cars and use them in business activities can charge the invoice for the rental in full, regardless of the mileage. This position was taken by the Supreme Administrative Court in its judgments of August 2013. Subsequently, this position was upheld by the Minister of Finance. At the end of 2013, he issued a general ruling in which he presented a position favorable for taxpayers, which provided for the settlement of rent for car rentals directly in tax costs. The rental cost should be settled in full, without the mileage limit.