Administration court on 100% VAT deduction from personal cars - in favour of taxpayers

On January 20, 2015 the Regional Administrative Court in Krakow has issued a favorable ruling on deduction of VAT related to personal cars.

A company has applied for a tax ruling and asked if it is allowed to deduct 100% of VAT on purchase and costs of use of personal cars if the cars will be used for personal and not business purposes by its employees (although personal use will be disallowed according to internal regulations of the company). Tax authorities have replied that 100% deduction will not be allowed. The company has appealed to the court.

The court has resolved that if a car is given for use to an employee there is always a possibility that it will be used for non-business purposes. It, however, does not deprive the taxpayer the right to 100% VAT deduction if such use is against the rules established by the taxpayer.

Hope that this favorable argumentation will be followed in next rulings, however, it ha to be noted that this ruling may still be appealed by tax authorities.

REFERENCES