Vintage car in activity - depreciation

Service-Tax

Probably every entrepreneur uses a car in his business, because it is necessary for the efficient handling of various company matters, including travel to the accounting office, ZUS or the tax office, purchase of goods, art. office and business etc. Some entrepreneurs decide to buy a new vehicle, but for financial reasons many newly opened companies initially use a private, used car. However, the question arises whether a vehicle considered a historic car can also be entered into the register of fixed assets and whether it can be depreciated on the same terms as in the case of other vehicles? Check, you will find the answer in our article!

Vintage car in activity - depreciation

Expenses related to the purchase of fixed assets and intangible assets are classified as company costs on the basis of depreciation write-offs. The same applies to motor vehicles (including a vintage car) that are company property.

This fact results from Art. 22a paragraph. 1 of the PIT Act, where we read:

"Depreciation is subject to (...) owned or jointly owned by the taxpayer, acquired or manufactured on its own, complete and fit for use on the date of acceptance for use:

  1. structures, buildings and premises owned separately,
  2. machines, devices and means of transport,
  3. Other items

- with an expected period of use longer than one year, used by the taxpayer for the purposes related to his business activity or put into use on the basis of a rental or lease agreement or an agreement referred to in art. 23A, paragraph 1, called fixed assets.

Pursuant to Article 22c of the PIT Act "the following are not subject to depreciation:

  1. land and perpetual usufruct rights to land,
  2. residential buildings with cranes located in them or residential premises used for business activity or leased or rented under a contract, if the taxpayer does not decide to depreciate them,
  3. works of art and museum exhibits,
  4. goodwill, if this value was created in a different way than specified in art. 22b paragraph. 2 points 1 and 1a,
  5. assets that are not used as a result of suspension of business activities under the provisions on suspension of business activities or cessation of activities in which these items were used; in this case, these components are not depreciated from the month following the month in which the activity was suspended or discontinued

- known as fixed assets or intangible assets, respectively. "

Therefore, it can be concluded that a historic car, provided it meets the above-mentioned conditions for recognizing it as a fixed asset, may be included in the company's assets and be subject to depreciation. It is questionable whether a historic car should not be excluded from depreciation as it should be considered a museum exhibit.

Currently, the one-off depreciation limit is PLN 10,000. As for the depreciation of passenger cars, according to Art. 23 sec. 1 point 4 write-offs in excess of the amount:

  • PLN 225,000 - in the case of an electric passenger car
  • PLN 150,000 - for other passenger cars

they may not constitute a tax deductible cost.

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Historical car and museum exhibits

The PIT Act and the VAT Act do not define a work of art or a museum exhibit. According to the definition contained in the Great Dictionary of the Polish Language, a museum exhibit is an item available for viewing at an exhibition or in a museum. A vintage car does not meet this requirement because it is used in business for travel. A work of art, however - according to the Great Dictionary of the Polish Language - is a permanent creation of the human mind of a scientific or artistic nature. Due to the fact that the vehicles are produced in series, they do not have any unique features that could be expressed by the author. Confirmation of this position can be found in the individual ruling No. PPB1 / 415-520 / 09-2 / AM issued by the Director of the Tax Chamber in Warsaw on September 14, 2009.