Transport costs on the invoice for parts for a private car in the company
As part of my business, I use a private passenger car. I bought the necessary parts for the car, which were delivered to me by shipping - the invoice lists both the cost of the parts themselves and the shipping cost. How correctly should I account for such an expense and deduct VAT?
Running a business does not always mean owning a company car, as some taxpayers are more likely to use their private vehicles for company purposes. In this case, it is important to know when and at what values the transport costs on the invoice for parts for the car can be included in the KPiR, as well as how VAT will be deducted. Thanks to this, the entrepreneur can choose the most favorable tax solution for him.
Transport costs on the invoice for parts for a private car at KPiR
First of all, it is necessary to determine what conditions apply so that the expenditure can be considered a tax-deductible cost. Pursuant to Art. 22 sec. 1 of the PIT Act "tax deductible costs are costs incurred in order to achieve income or to maintain or secure the source of income, with the exception of the costs referred to in article 1. 23". It should be noted here that the costs of transport related to the purchase of parts for the car used in the company have not been included in the catalog of costs excluded from tax costs. However, according to Art. 23 sec. 1 point 46 of the PIT Act, expenses related to the car owned by the taxpayer constitute a tax cost only within the limit of 20%.
Thus, according to the above, transporting parts to a private car can be a cost, but at 20% of its value.
The taxpayer purchased parts for a private car worth PLN 500 from the taxpayer. In addition, the invoice also includes delivery costs in the amount of PLN 50. In what amount will the expenses related to a given vehicle be included in the KPiR?
The sum of the invoice is PLN 550. Therefore, in the 13th column of the KPiR - other expenses, the taxpayer will record PLN 110, because 550 × 20% = 110.
Private car expenses and VAT deduction
As indicated in art. 86 sec. 1 of the VAT Act, the taxpayer has the right to reduce the output tax (on sales) by the amount of input tax (on purchase), if the purchased goods or services are related to activities subject to VAT. In addition, this right arises only in the period in which the buyer receives an invoice documenting the purchase and, at the same time, a tax obligation arises at the seller in relation to the goods or services sold.
After meeting the above conditions, VAT in the amount of 50% or 100% may be deducted from invoices documenting expenses related to a private car. A 50% VAT deduction is due when the vehicle is used both for business purposes and for private use. However, the taxpayer can also deduct 100% VAT only if 4 conditions are met simultaneously:
- reports the vehicle to the tax office via VAT-26,
- the rules of using the vehicle in the company have been introduced,
- vehicle mileage register is kept for VAT purposes,
- the car will be used only for corporate purposes.
Meeting all the conditions in the case of a private car is a rare situation, therefore 50% VAT is usually deducted - in this case there is no obligation to meet the formal conditions imposed by the VAT Act.
An entrepreneur running a sole proprietorship uses a private car for activities subject to VAT. This vehicle is also used by him for private purposes. This month, he purchased new tires, to which the seller added the cost of transport. Both the tires and the cost of delivery were documented with an invoice worth PLN 615 gross (net: 500, VAT: 115).At what value will the taxpayer deduct VAT if he received an invoice confirming the purchase together with the goods?
The taxpayer has the right to deduct VAT due to the fulfillment of all requirements (tax obligation with the seller, connection with taxable activities, receipt of an invoice). Due to the fact that the vehicle is also used for private purposes, it will deduct 50% of the VAT from the invoice, i.e. PLN 57.50, because 115 × 50% = 57.50. Start a free 30-day trial period with no strings attached!
Posting an invoice for parts and shipment to a private car in the wFirma.pl system
In the wFirma.pl system, the taxpayer has the option of entering an invoice related to a private vehicle in full value - without the need to make independent calculations in accordance with the applicable limits. However, in order for the system to be able to account for the expense in the correct values, the vehicle must first be entered into the system in accordance with the article: Adding a private car to the system.
Then, invoices related to the current use of the vehicle should be posted through the tab: EXPENDITURE »ACCOUNTING» ADD »VAT INVOICE / INVOICE (EXCLUDING VAT), where TYPE OF EXPENDITURE: OTHER EXPENSES RELATED TO THE CURRENT USE OF THE VEHICLE. The value fields should be completed with the values consistent with the invoice received. Additionally, in the VEHICLE field, you must select a previously added private car to the system.
After saving, the expenditure will be in the KPiR within the limit of 20%, and in the case of a VAT invoice in the VAT purchase register in 50% of the value - if the taxpayer does not meet all the conditions entitling to a full VAT deduction.