Low value car as a company's fixed asset

Service-Tax

Fixed assets in a company should be included in company costs through depreciation write-offs. In addition, they must be entered in the register of fixed assets. What if you buy a low-value fixed asset? Can a car with a low initial value of up to PLN 3,500 become a company's fixed asset?

Low-value car - how to settle its purchase?

In the case of purchasing a fixed asset with a small initial value, which does not exceed PLN 3,500 (net for active VAT payers, gross for tax-exempt taxpayers), there are two methods of classifying the expenditure as tax deductible costs:

  1. entering a fixed asset into the records and subjecting it to depreciation (due to its low value, one-off depreciation is possible),

  2. recognition of the expenditure for the purchase of a low-value fixed asset directly to company costs.

A low-value car - which is better: one-off depreciation or a direct deduction?

It is up to the taxpayer to choose the method of including such an expense in costs. Thanks to the introduction of a low-value car to the register of fixed assets, it will be possible to directly account for expenses related to its operation: fuel purchase, replacement and purchase of parts, parking costs, etc.

If the taxpayer does not decide to enter a low-value car into the company's fixed assets register - it will be necessary to keep a register of vehicle mileage, i.e. kilometers. Operating expenses will then be included in tax deductible costs up to the mileage limit (the amount resulting from multiplying the number of kilometers of the actual vehicle mileage and the rate for 1 km).