Car trade on a registered lump sum

An entrepreneur who trades in cars may tax this type of activity with a registered lump sum. However, the problem may be choosing the right rate, depending on the situation, as they may be different. The taxpayer must also bear in mind that some type of activity will result in the loss of the right to use the lump sum.

Checked-in lump sum - what is it?

Lump sum on registered revenues is a simplified form of taxation. The advantage of this method of taxation is that there is no need to keep a book of revenues and expenses. The taxpayer only needs to keep records of revenues, fixed assets and intangible assets.

When we conduct a taxable activity using a registered lump sum, the amount of tax due depends only on the amount of revenues. The costs do not affect the tax paid to the tax office. The flat rate is fixed, regardless of the amount of income.

Important! Taxpayers who tax their activities on a lump-sum basis must remember about the income limit. An entrepreneur who in the previous tax year exceeded the income in the amount of EUR 250,000, may no longer use this form of taxation.

However, it should be borne in mind that individual lump sum rates have been established for different types of activity. However, this is not a form of taxation available to all taxpayers. Therefore, when we start a business or extend its scope to trade in cars, it is important to precisely define the company's profile.

Company profile and the type of taxation

An entrepreneur who intends to trade in cars should specify exactly what he will be doing. The profile of the conducted activity will determine the tax consequences in terms of the lump sum and recorded revenues.

Car trade - what does it mean exactly?

In order to specify the scope of the activity related to cars, the entrepreneur should know what is meant by the term car trade.

Well, trade is a service activity consisting in the unprocessed sale of previously purchased products and goods.

Therefore, car trade is understood to mean the purchase and resale of a car without making any changes to it. It is assumed that the condition of non-processing is also met when the taxpayer makes minor repairs to the vehicle, without changing its form and purpose.

Car trade and lump sum

If the taxpayer carries out the activity of purchasing cars for resale, such activities should be treated as car trade. Such trade is taxed with a flat rate of 3% on recorded revenues. This is the lowest flat rate a taxpayer can tax on a sale.

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Mediation in the sale of vehicles and a registered lump sum

However, if the trader does not trade cars directly, but only participates in the commercial transaction between the seller and the buyer, the situation is different.

Important! Activities classified as intermediation services in the wholesale of passenger cars and vans (PKWiU 45.11.4) are taxed at a 17% registered flat rate.

It should be borne in mind that in the case of intermediation in the sale of cars, the taxpayer's income is the commission obtained from the sale, and not the entire price obtained from the sale of the vehicle.

Activities carried out in the form of a commission and a lump sum on recorded revenues

The operation of the commission commission consists in the fact that the party accepting the order (commission agent) undertakes to sell or buy movable goods for the account of the commissioner (commissioner), but on his own behalf, while the commission agent receives remuneration for these activities (commission).

Important! An entrepreneur who runs a car dealership on a lump-sum basis on recorded revenues, is obliged to tax sales at a rate of 8.5%.

At the same time, the commission agent's revenue is the commission obtained from the sale, not the entire amount of the car sale.

Trade in auto parts deprives you of the right to a lump sum?

According to Art. 8 of the Act on flat-rate income tax on certain revenues earned by natural persons, taxation in the form of a flat-rate tax on recorded revenues shall not apply to taxpayers who receive, in whole or in part, revenues from activities in the field of trade in parts and accessories for motor vehicles.

Therefore, if a taxpayer, apart from trading cars, starts selling car parts, he loses the right to tax in the form of a lump sum on recorded revenues.

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However, if the taxpayer purchases car parts and accessories in order to repair a given vehicle, and their value is included in the price of the service, this does not deprive the taxpayer of the right to tax the activity with a lump sum. On the other hand, when car parts and accessories constitute a separate item on the invoice, and thus generate income from activities in the field of trade in parts and accessories for motor vehicles, they result in the loss of the right to a registered lump sum. It does not really matter whether they are new or used parts.

As it follows from the above, the possibility of applying taxation of activities with a lump sum and the rate applied depend on the scope of the activity. Therefore, when starting a business related to car trade, it is necessary to meticulously specify what the company will be dealing with.