Tolls paid abroad for fuel and highways as a company expense

Service-Tax

An entrepreneur incurs many different expenses in the course of business activity. If the activity is global, such expenditure may also apply to costs paid outside the country. In terms of such expenses, very often there are tolls paid abroad for fuel and motorways. It may be interesting and important to correctly settle such expenses both on the basis of the provisions of the VAT Act and the provisions of the Personal Income Tax Act.

Settlement of the indicated expenses on the basis of VAT

First of all, it should be pointed out that, in accordance with the adopted rules, charges for fuel and motorways paid abroad are treated on a par with domestic charges for such expenses. As a result, there is no intra-Community acquisition of goods on the part of the Polish VAT payer. As a result, the taxpayer is not required to settle the tax due on such a purchase. Based on Article. 22 sec. 1 point 3 of the VAT Act, it is assumed that the place of delivery of non-shipped and non-transported goods is the country in which the goods are located at the time of delivery. As a consequence, expenses for refueling abroad are not shown in the VAT returns.

The same thesis was presented by the Director of the Tax Chamber in Bydgoszcz in the individual interpretation of October 28, 2014, ITPP3 / 443-442 / 14 / MD: In the opinion of the Applicant, the purchase in the territory of the European Union of fuel poured into the tank of a barge, which is used only for the provision of intra-Community transport services by the Applicant in the territory of the European Union countries (mainly the Netherlands), does not constitute an intra-Community acquisition of goods in the light of the provisions of Art. 5 sec. 1 point 4 and art. 9 sec. 1 of the Value Added Tax Act, because this fuel is not shipped or transported from the territory of another Member State to the territory of Poland.

Therefore, for the intra-Community acquisition of goods to take place, it is necessary to transport the goods from the country of commencement of shipment to another EU country and acquire the right to dispose of the goods as the owner. So, in the sense of the above-mentioned provisions, the intra-Community acquisition of goods on the territory of Poland is generally understood to mean the acquisition of goods which, as a result of the delivery, are shipped or transported by the person making the delivery, the buyer or for them from the territory of another Member State to the territory of Poland.

While in the case of refueling we are dealing with the delivery of goods, the provision of services occurs with the tolls for the use of motorways. In this regard, therefore, reference should be made to the provisions governing the method of determining the place of performance. Under the law, the motorway is treated as real estate. As a result, the relevant provision in this case will be Art. 28e of the VAT Act, which states that in terms of real estate services, the place of provision is the location of the real estate. This means that the use of the motorway, for example in Germany, will be taxed in Germany. Another consequence of such an interpretation of the provisions is the statement that Polish entrepreneurs do not import services.

This is confirmed by numerous tax interpretations, including Director of the Tax Chamber in Łódź of December 7, 2015, no.IPTPP2 / 4512-531 / 15-5 / IR: In light of the above, in the case of the service consisting in the provision of toll motorways, tunnels or bridges in Belgium, the Netherlands, Luxembourg, Denmark and Sweden, provided by the above-mentioned a Dutch company for the benefit of the Applicant, the place of providing this service in the light of the above-mentioned art. 28e of the Act, as a service related to real estate, is not the territory of Poland. The service in question is subject to taxation in the countries in which the above-mentioned highways, tunnels or bridges. Consequently, it should be considered that in the circumstances of the present case the Applicant is not a taxpayer within the meaning of Art. 17 sec. 1 point 4 of the Act. Thus, the activity in question, pursuant to Art. 2 point 9 of the Act, does not constitute an import of services.

Tolls paid abroad for fuel and motorways on the basis of income tax

Generally, charges for fuel and motorways fulfill the provisions of Art. 22 of the PIT Act, which indicates which expenses may be considered tax deductible costs. As a result, if such fees have a cause-and-effect relationship with the conducted business activity and the purpose of incurring them is to generate revenues or to preserve or secure a source of revenues, they may be considered tax costs.

The tax cost will be the gross amount of the expenditure, i.e. including VAT paid in another country, including charges for fuel and motorways paid abroad. As it follows from Art. 23 sec. 1 point 43 lit. a) of the PIT Act, the tax cost may be the input tax:

  • if the taxpayer is exempt from tax on goods and services or purchased goods and services in order to produce or resell goods or provide services exempt from tax on goods and services,

  • in the part where, in accordance with the provisions on tax on goods and services, the taxpayer is not entitled to a reduction in the amount or a refund of the difference in tax on goods and services (if the input tax on goods and services does not increase the value of a fixed asset or intangible and legal value).

Tax authorities accept as accounting evidence not only a foreign invoice, but also a fiscal receipt, provided that it is properly described in accordance with accounting requirements. For the purposes of income tax, it is not necessary for the taxpayer to always have an invoice in order to recognize the tax charge.

In practice, it is usually assumed that if a document meets the requirements for recognition as an accounting document, in accordance with the provisions of the Accounting Act, it may be considered a document constituting the basis for recognizing an expenditure as tax deductible costs, which means that fees paid abroad for fuel and motorways, if properly documented, will be included in the KPIR.