– The proposed changes can help to eliminate existing problems and to facilitate the settlement of income tax on the use of a company vehicle for private purposes – says Łukasz Czucharski of the Tax Committee of the Employers of Poland.
Government bill on facilitating operation of economic activity (the so-called fourth deregulation act) was referred to the Sejm. One of the proposed changes applies to settlement of income tax on the use of a company vehicle for private purposes. The current system of determining the value of this benefit is replaced by a flat-rate scheme with effect from 1 January 2015.
Currently, the difficult part is determining monetary value of the benefit i.e. the use of a company car for private purposes. The changes are intended to eliminate the previously reported problems and make it easier for the taxpayer to settle tax for the benefit.
At the moment one of the ways to determine value of the benefit is based on the assumption that it is equal to the rent price for the same vehicle in a car rental. Following the introduction of flat-rate system it will not be necessary to keep records of private use mileage. There will also be no problem of determining the appropriate rental rate.
Under the amendment rates will be determined in the Act. The value of the benefit is is set at 250 zlotys per month for cars with engine capacity of 1600cc and 400 zlotys per month for cars with an engine capacity of over 1600 cc. If the car is used for private purposes only part of the month, the value will be determined for each day of use as 1/30 of the monthly amounts.
Łukasz Czucharski, Tax Committee of the Employers of Poland