Approval has many names

Historical background

Until April 30, 2004, the rules of VAT deduction concerned, inter alia, passenger cars and those vehicles with a maximum load capacity of less than 500 kg. After that date, the legislator decided to introduce an additional restriction in the form of the so-called "Lisak pattern". On the basis of a specific calculation model, the taxpayer could find out whether or not he was entitled to a deduction. In practice, it turned out that some cars were prohibited from reducing the amount of input tax by the amount of input tax, even though they physically met the criteria for trucks with full deduction.

Due to the judgment of the European Court of Justice of 22 December 2008 in the Magoora case (C-414/07), it turned out that Poland violated the standstill principle, i.e. extended the scope of restrictions on VAT deduction, although it was not entitled to do so .

As a result, the Ministry of Finance admitted that the Lisak formula should not be used. In the aftermath, it announced that the legal status prior to the April 30, 2004 amendments had been "reactivated".

Due to the bizarre situation - taxpayers could not apply the repealed act, the "old" provisions were re-included in the act, which resulted in Art. 86a and 88a of the Value Added Tax Act.

Provisions of the act on road traffic

The VAT Act indicates, inter alia, motor vehicles with a total weight of less than 3.5 tonnes, in which the number of seats (seats), including the driver's seat, is:

a) 1 - if the maximum load capacity is greater than 425 kg,

b) 2 - if the maximum load capacity is greater than 493 kg

c) 3 or more - if the maximum load capacity is greater than 500 kg.

Pursuant to Art. 86 sec. 4 of the VAT Act in the wording until March 31, 2014 and Art. 12 section 3 of the Act of February 7, 2014 amending the Act on tax on goods and services and certain other acts (in force since April 1, 2014), the permissible load capacity of the vehicle and the number of seats (seats) are determined on the basis of documents issued in accordance with with the provisions of the road traffic law.

Owning these cars involved a full deduction of VAT, provided that the approval criteria were met.

On Polish roads, you can most often find cars whose year varies from 1 to 15 years. Depending on when they were registered, approval was obtained on different terms (more on that later in the text).

If the entrepreneur has obtained the appropriate certificate of the truck status (depending on the legal status) and then has not made any structural changes to the vehicle that could exclude the features stated in the certificate, then until now such a vehicle is considered a truck according to the VAT Act.

What is approval?

According to the dictionary definition, approval should be understood as checking a device before granting permission for its production, operation or sale, as well as a permit issued after such verification.

In practice, approval is a permit for the use of motor vehicles, as a rule, in the country where they were issued. However, due to Poland's membership in the European Union, the validity of this certificate also extends to the territories of other Member States.

Hence the importance of this certificate for automotive manufacturers, as obtaining approval enables them to actively sell the manufactured cars.

Three approval periods in Poland

Approval has changed in Poland over the years. The rules for car registration, and thus the confirmation of parameters under the road traffic regulations, can be divided into three stages, ranging from short annotations in the registration certificate, to N1 approval at the moment.

The first phase concerned cars that were registered in the late nineties to 2006. At that time, the status of the car was specified in the registration documents in the form of annotation, among others on whether it is a truck with the number of seats and the permissible load capacity.

For example: if a car was registered in 2003 with the above parameters, it is still considered a truck - because in that legal state the provisions of the Road Traffic Act confirmed the technical conditions of the vehicle in this way. There was no N1 approval yet.

The second group of vehicles mainly concerns vehicles that were produced until 2004 but were registered with a later date. For this purpose, it was necessary to go to the car manufacturer to obtain the appropriate certificate. In practice, the activities involved a visit to a car dealer. If the entrepreneur had a passenger car, he requested information from the dealer whether the vehicle would be a truck in the legal status valid until April 30, 2004. If the answer was affirmative - the approval was proof that the car is still a truck.

It should be added that obtaining the certificate was also possible at regional vehicle inspection stations.

Since the approval is an official document - for tax purposes, it was sufficient to present only a copy of it.

In addition, it was also necessary to pay attention to the so-called "Long number" - the first 18 characters in the registration certificate that specified the type of approval. The other numbers referred to the unique vehicle number.

The beginning of the third approval period in Poland is dated June 22, 2013. On this day, the amendment to the road traffic law, which implemented the provisions of Annex XIX of Directive 2007/46 / EC, entered into force. Its annex specifies the deadlines after which the registration of a given vehicle will require a CoC document (EC certificate of conformity), which will confirm obtaining a European approval certificate.

Generally, the purpose of this amendment was to eliminate older-model cars which, according to previous legal states, were considered trucks. From that moment on, vehicles from the first and second period were not eligible for heavy goods status.

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In practice, it turned out to be ineffective, because the legal status from 2004 mentioned at the beginning has returned, thus giving older cars a chance for full deduction.

The situation is of great importance for the deduction of VAT on the purchase of fuel after April 1, 2014. In the case of cars that will be trucks on the basis of the approval document (from all three periods), it will be possible to deduct 50% of the VAT amount on this account. However, a necessary condition is the use of these cars in business.