Sales of passenger cars from 2019 - what changes?

Service-Tax

The amendment to the PIT Act, in force from 2019, introduces revolutionary changes in the settlement of expenses for passenger cars used in business activities, which applies to both passenger vehicles included in fixed assets used under a rental or leasing agreement, as well as private cars. The introduced changes will also have a significant impact on the settlement of the sale of passenger cars recorded in fixed assets. Will the entrepreneur gain or lose more by selling a passenger vehicle owned in fixed assets? We explain how the sale of passenger cars from 2019 will be accounted for under the new rules and what other changes regarding cars are introduced by the amendment to the PIT Act.

Overview of changes in passenger car settlements from 2019.

The consequences of the changes introduced by the amendment to the PIT Act in force from January 1, 2019 in the settlements of passenger cars in comparison to the existing regulations are presented in the table below.

Cost settlement criterion

By the end of 2018

From 2019

Settlement of operating costs of passenger cars used in the business in a mixed manner (both in business and privately)

no limitation (100% cost deduction)

up to the limit of 75% of costs, without the obligation to drive mileage

Limit on depreciation charges for passenger cars acquired for business

20 thousand euro

- 150 thousand PLN for a passenger car,

- 225 thousand PLN for an electric passenger car

Settlement in costs of fees resulting from a lease, rental or lease agreement

no limitation (100% cost deduction)

up to 150 thousand PLN for a passenger car (PLN 225 thousand for an electric passenger car) in proportion to the value of the car

Settlement of operating costs and insurance premiums for a private car used in the business

100% of the costs + the obligation to drive mileage

20% of costs (80% of expenses are excluded from tax costs) + no mileage allowance required

Sales of passenger cars from 2019

Until the end of 2018, when selling a passenger car in the register of fixed assets, which was not fully depreciated, its undepreciated part of depreciation became tax-deductible (in full amount). Additionally, the part of the non-depreciated write-offs was not covered by the limit of PLN 20,000 which was in force so far. euro.

As indicated by the provisions of Art. 24 sec. 2a of the PIT Act, income or loss in business activity from the sale of a passenger car that is a fixed asset is the difference between the income from the sale of this vehicle for consideration and its initial value shown in the register of fixed assets, which was limited to a limit not exceeding PLN 150,000. PLN for passenger cars (for electric cars, PLN 225 thousand) and after reducing this value by the sum of depreciation charges made in the costs.

Under the new rules, introduced from 2019, it will be the entrepreneur who wants to sell a passenger car with a value of more than PLN 150,000 held in the fixed assets register and not fully depreciated. zloty. The seller will not deduct all non-depreciated write-offs as costs, as he will only be able to deduct the value of the purchased passenger car, limited to the limit of PLN 150,000. PLN (225 thousand. PLN for electric cars), less depreciation write-offs made until the moment of sale.

Example 1.

In 2019, the entrepreneur purchased a passenger car with a value of PLN 300,000. zloty. The vehicle was entered into the register of fixed assets and depreciated on a straight-line basis at the rate of 20%. After a year, he decided to sell the car from the company. What value will it be able to include in the costs?

The initial value of the car, deductible in costs based on depreciation charges, taking into account the limit applicable from 2019, will amount to PLN 150 thousand. zloty. Thus, for a year, the value of depreciation charges deducted in costs amounted to PLN 30 thousand. PLN (PLN 150 thousand x 20% depreciation rate). This means that when selling to costs, the entrepreneur will deduct only PLN 30,000. PLN (i.e. the exact value of the depreciation write-offs made). On the other hand, under the old rules in force until 2018, the entrepreneur could post 120 thousand. PLN, i.e. the entire value of uncollected depreciation write-offs that arose at the time of sale. From 2019, the principle of accounting for non-depreciated write-offs on the sale of a passenger car entered into the fixed assets register will change. The cost becomes the initial value of the car, limited to a limit of 150,000. PLN (225 thousand. PLN for electric passenger cars), less the value of depreciation charges deducted until the sale. The value of non-depreciated write-offs of a car that is a fixed asset will no longer constitute a tax deductible cost (as it was until the end of 2018).
Importantly, the provision applies to passenger cars entered into the register of fixed assets after December 31, 2018.

As a result of the introduced changes, the sale of passenger cars from 2019, which were entered into the register of fixed assets and whose value exceeds PLN 150 thousand. PLN and were not fully depreciated at the time of sale, it becomes less profitable, as the entrepreneur will be obliged to demonstrate taxable income, which will not be reduced by non-depreciated depreciation write-offs.

Selling a car in the company

The wfirma.pl system enables the entrepreneur to easily sell company cars in fixed assets, which should be documented with an invoice.To do this, go to the RECORDS »FIXED ASSETS tab in the system, select the vehicle intended for sale and select the SALE option from the top menu. Then the invoice issue window will appear, in which you need to fill in the buyer's data and other basic information, including the date of issue, date of sale, method and date of payment. Finally, the value of the vehicle sold and the relevant VAT rate must be specified.

After saving, the invoice will be posted in the net value to column 8 of the KPiR - Other revenues (in the case of keeping the KPiR) or the Revenue register in the column corresponding to the selected flat rate (in the case of the registered lump sum), as well as to the sales VAT register (in the case of a VAT taxpayer) .

If the car has not been fully depreciated at the time of sale, its unamortized part in the appropriate amount will be tax deductible and will be booked in the form of an internal document in column 13 KPiR - Other expenses (in the case of keeping KPiR).

Additionally, the system generates the LT document - liquidation of the fixed asset, which will be added to the liquidated fixed asset in the ASSET DOCUMENTS tab.