Sale of a fixed asset financed with a subsidy - settlement of costs
Many entities have used and will benefit from additional financial support, such as grants. It is a good solution both at the start and in the further stages of business activity. The funds obtained are usually spent on the purchase of equipment and fixed assets. In the case of the latter, it should be remembered that the depreciation write-offs from their initial value do not constitute a tax deductible cost, as provided for in Art. 23 sec. 1 point 45 of the PIT Act. Entrepreneurs often decide to sell them over time. How then should it be accounted for? Does it matter that the purchase was financed with a grant? What regulations should I comply with? Check how to settle the sale of a fixed asset financed with a subsidy.
Costs related to the sale of the fixed asset
The general rule of settling costs resulting from the sale of a fixed asset is regulated in Art. 23 sec. 1 point 1 of the PIT Act. According to its content, expenses for the purchase or production of fixed assets on your own, including those included in the acquired enterprise or its organized parts, are not considered to be tax deductible costs. These expenses, updated in accordance with separate regulations, less the sum of the depreciation referred to in article 1. 22 h of paragraph 1. 1 point 1 of the PIT Act, however, are a tax-deductible cost in the case of the sale of fixed assets for consideration, regardless of the time of their incurrence.
Therefore, in a situation where a non-fully depreciated fixed asset is sold, its non-depreciated part of the initial value will constitute the tax cost. Therefore, the depreciation write-offs not previously included in the costs, starting from the month in which the sale took place, should be included in the tax book of revenues and expenditures in one amount. This type of value should be included in col. 13 KPiR - other expenses.
Sale of a fixed asset financed with a subsidy - costs
What should be done in the case of fixed assets financed by a grant? Well, the tax authorities in this matter represent two positions - the first one that allows the redemption of the initial value to be included in company costs and the second, which categorically forbids it.
Among the favorable positions of the tax authorities for taxpayers, the individual interpretation of the Director of the Tax Chamber in Łódź, ref. No. IPTPB1 / 415-99 / 12-2 / MD of April 26, 2012. According to its content, the entrepreneur allocated the subsidy from the PUP for the purchase of a car, which he entered into the register of fixed assets and intangible assets. The taxpayer made depreciation write-offs including as tax deductible costs depreciation write-offs from the part of the initial value not financed with the subsidy, while the depreciation write-offs for the part that was covered by the subsidy were not included in the tax costs. In light of the applicable regulations, the tax authority stated that the initial value of the car, less the depreciation (both tax deductible and non-tax deductible), will be the cost of revenue in the case of sale of the car. Therefore, the entire unamortized part of the initial value of the fixed asset will be a tax deductible cost at the time of its sale.
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A completely opposite position was presented in the interpretation of the Director of the Tax Chamber in Bydgoszcz, ref. No. ITPB1 / 415-223 / 13 / PES of 29 April 2013, where the entrepreneur obtained a subsidy to start a business, which he allocated for the purchase of a fixed asset - a passenger car. Tax deductible costs include only depreciation write-offs from the part of the car value that was financed from the taxpayer's own funds. The tax authority stated that it is not possible to include the entire non-depreciated initial value of a fixed asset in tax deductible costs. The unamortized initial value of the car, which was covered by the subsidy, may not be deductible for the sale of the car.
The explanations of the Minister of Finance, in which the ministry supports the position favorable to taxpayers, may prove decisive in this matter. In the opinion of the Ministry of Finance, in the case of the sale of a fixed asset, the tax cost should be the cost of its purchase, constituting the initial value less the sum of depreciation write-offs, regardless of the source of its financing.