Car market value - what should you know?
The market value of the car is particularly important when we purchase the vehicle from a natural person under a sale and purchase agreement or when we import it from abroad. However, this is not the only situation in which this knowledge is important.
The market value of the car must be correctly established when the entrepreneur decides to enter a private vehicle in the fixed assets register of the company and does not have a document confirming the price he paid at the time of purchase. The market value of the car is also an important issue when we enter a vehicle acquired through a donation or inheritance into the fixed assets register. Therefore, the question arises, what is market value and how do the regulations relate to this concept?
Car market value and PCC
When purchasing a car from a natural person not conducting business activity, the value of which exceeds PLN 1,000, the taxpayer is obliged, within 14 days from the date of purchase, to pay tax on civil law transactions in the amount of 2% of the vehicle value. At the same time, the tax base will not always be the value shown in the purchase contract. This will happen especially when the purchase price differs significantly from the prices of a given type of vehicle on the market.
Therefore, it should be borne in mind that the tax base must be determined by the taxpayer himself, but regardless of the value shown in the PCC-3 declaration, the tax office will use the market value of the vehicle in the first place to calculate the tax, because this is provided for in Art. 6 of the Act on tax on civil law transactions. In connection with the above, if the value of the tax base presented by the taxpayer is significantly different from the market value of a given type of vehicle, the taxpayer should take into account that the tax authority will ask him to provide relevant explanations.
So what is the market value according to the Act? Pursuant to Art. 6 sec. 2 of the Act on tax on civil law transactions, the market value is the value determined on the basis of the average prices used in the trade of items of the same type and species, taking into account their location, condition and degree of wear as at the date of the acquisition.
This means that to determine the market price of a car, we will need knowledge of the value of the vehicles:
the same type and brand,
with the same production year and mileage,
with similar equipment,
available on the market within the same time frame.
In addition, every car buyer knows that the purchase price is influenced by other factors, such as the technical condition at the time of purchase, collision-free driving of the previous owner or the sales circumstances. Despite the fact that the definition contained in the act indicates the condition and degree of wear of the item as essential elements in determining the market value, the tax authorities, who use their tools to calculate the market value of the car, do not always take the above elements into account. Therefore, this should be borne in mind and this fact should be borne in mind. If, at the time of purchase, we know that the price we paid for a vehicle differs from the average value of vehicles of the same model on the market, it is worth gathering evidence to justify the lower value if we intend to use it as the basis for calculating the PCC tax. They can be, for examplerepair invoices, photos, expert opinions.
Excise tax and the market value of a car
We are obliged to pay the excise tax when the car is imported from abroad. In the case of excise duty, similarly to the PCC tax, the market value of the vehicle is important when the tax base shown in the declaration differs significantly from the average market price.
The taxable amount for excise duty in the case of purchasing a car under the intra-Community acquisition procedure is the amount that the taxpayer is obliged to pay for the car, and in the case of import, its customs value increased by the duty due. Nevertheless, the customs office compares the purchase price of a car abroad with the market price of such a vehicle registered in Poland.
Pursuant to the Excise Duty Act, the market value of a car is a value determined on the basis of the average price of a car of the same make, model, year and, if it is possible to determine it, registered on the domestic market, on the day when the tax obligation arises. - with the same equipment and in approximate technical condition as the passenger car purchased on the territory of the country or acquired within the Community.
If the amount of the tax base, without just cause, significantly deviates from the average market value of the car, the tax authority or the tax inspection authority calls on the taxpayer to change the amount of the tax base or indicate the reasons justifying its amount in an amount significantly different from the average market value. In the event of no reply, failure to change the amount of the tax base or failure to indicate the reasons that justify its amount significantly deviating from the average market value of the car, the tax authority or the tax inspection authority will determine the amount of the tax base itself. Due to this state of affairs, it is not worth lowering the market value of the car shown for taxation with excise duty.
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The market value of the car as a fixed asset
In a situation where the entrepreneur decides to introduce his private car to the company, and he no longer has a proof of purchase, he may do so on the basis of a declaration prepared by himself. However, then many entrepreneurs wonder what value of the car they should take as the initial value. The answer to this question was included by the legislator in Art. 22 g of paragraph 1. 8 of the PIT Act, which says that if it is not possible to determine the purchase price of a fixed asset before the date of its entry into the register of fixed assets, the initial value is the value resulting from the valuation made by the taxpayer, taking into account the market prices of fixed assets of the same type from December of the year preceding the year when the records were established and the state and degree of their wear. Consequently, an entrepreneur who does not have a purchase document, wishing to introduce a private car to the company's property, should follow the above rule. This rule also applies when we enter a car into the company's fixed assets register, the value of which at the time of handover, due to the passage of time, significantly differs from the purchase price.
How to determine the fish value of a car on a donation
On the other hand, in the case of introducing a car acquired through a donation or inheritance to the company's property, art. 22 g of paragraph 1. 1 point 3 of the PIT Act, which states that in the event of acquisition by inheritance, donation or otherwise free of charge, the initial value is considered to be the market value on the date of acquisition, unless the donation agreement or the free transfer agreement specifies this value in lower height. At the same time, the provisions on personal income tax do not directly define the concept of market value.
As you can see, the concept of market value is quite often used under tax regulations. Therefore, it is worth knowing when its knowledge is particularly important and how to correctly determine this value in order to avoid unpleasant consequences on the part of control authorities.