Private passenger car - transfer to the company's property
A private passenger car purchased under a purchase and sale contract for a natural person may also be entered into the assets of your company. The article will show you how to do this correctly. Private car in the company can be used in two ways. The vehicle may be transferred on the basis of a transfer declaration to the company's assets and be accounted for as a fixed asset as part of the business activity. In the second option, it may still constitute the property of a private person (not be transferred to the company's property as a fixed asset), and it may be settled in the company as part of PIT kilometers.
Private passenger car in the company - declaration of transfer to the company's property
If you choose the first option, certain conditions must be met. In the first place, the entrepreneur should draw up a statement on the transfer of private items for business purposes. This declaration should contain:
- date and place of preparation;
- entrepreneur's data;
- a declaration of the right to ownership of things (owner / co-owner);
- determination of the asset (name, type, etc. in the case of, for example, a car, it will be the make, year, identification number) and any other data enabling the entry of the fixed asset into the records and the proper determination of the depreciation rate;
- the date on which the asset was transferred to the business;
- the initial value of the transferred asset;
- owner's signature.
Another condition for the transfer of a private vehicle to a company is that the car meets the definition of a fixed asset, so the following conditions should be met at the same time:
- be owned or jointly owned by the taxpayer;
- be acquired or manufactured in-house;
- be complete and fit for use on the day of acceptance for use;
- have an intended service life of more than one year;
- be used by the taxpayer for the purposes related to his business activity or put into use on the basis of a rental, lease or leasing agreement.
When all of the above conditions are met, the vehicle can be included in the fixed assets register.Then, in order to determine the initial value of a given asset, the basic determinant here will be a purchase document (i.e. usually a purchase contract or a VAT invoice). In the absence of proof of purchase, the initial value should be based on market prices.
Private passenger car in the company - VAT settlement rules
When a taxpayer decides to transfer a private vehicle to a company and use it only for business purposes, he has the right to deduct 100% VAT from operating expenses (including fuel). Then it will be necessary:
- reporting the car to the Tax Office on the VAT-26 form,
- keeping a detailed mileage test for VAT purposes,
- introducing the regulations (rules) of using the vehicle in the company.
Importantly, it should be clear from the mileage run that the passenger car introduced to the company's assets is used only for business purposes. Otherwise, the Tax Office will challenge the right to a full VAT deduction. If the car is to be used for mixed purposes, only 50% of the input VAT resulting from the purchase document can be deducted. The uncounted part will be tax deductible and there is no need to drive mileage here. Thus, for a car that is a company's fixed asset, there is no obligation to run mileage kilometers for PIT purposes (income tax), but it may be necessary to run VAT kilometers if you choose a 100% VAT deduction.
A private passenger car in the company's fixed assets register and depreciation
When entering a car into the register of fixed assets, it must be depreciated (usually 20%) and every month in the KPiR in column 13 - other expenses - depreciation write-offs will be posted, starting from the month following the month in which the fixed asset was accepted for use.