Moped and motorcycle in the company - how to deduct VAT?


Entrepreneurs more and more often use two-wheelers in their business activities. A moped or a motorcycle in a company is a good solution for entrepreneurs who are struggling with rising fuel prices and wasting time on stops in city traffic jams. It is worth considering what - apart from those mentioned - benefits may be achieved by the owner of the company in connection with the use of a two-wheeler for business purposes.

A moped and a motorcycle in the company

The decisive factor in determining the scope of the right to deduct VAT is to establish the differences between a moped and a motorcycle. For this purpose, use the definitions of these terms contained in the Act of June 20, 1997, Road Traffic Law:

  • moped - a two- or three-wheeled vehicle, equipped with an internal combustion engine with a cylinder capacity not exceeding 50 cm3 or with an electric motor with a power not exceeding 4 kW, the structure of which limits the speed to 45 km / h.

  • motorcycle - a motor vehicle equipped with an internal combustion engine with a cylinder capacity exceeding 50 cm3, two-wheeled or multi-track with a sidecar. The term also includes a tricycle with symmetrical arrangement of the wheels.

Due to the fact that a motorcycle is a motor vehicle and a moped is not, the VAT payer is subject to various tax consequences.

A moped in an enterprise and the deduction of VAT

Due to the fact that, in accordance with the regulations, the moped is not considered a motor vehicle, the purchase of the moped, fuel, and other expenses related to its operation, e.g. parts or service, is entitled to a VAT deduction on general terms.

If the purchased moped is to be used only for taxable activities, the entrepreneur has the full right to deduct VAT.

A great convenience for the entrepreneur is the lack of the obligation to report the moped to the tax office, and additionally, it is not necessary to keep a vehicle mileage record for VAT purposes.

Motorcycle in the company and 50% VAT deduction

Due to the fact that the motorcycle in the company is considered a motor vehicle, there is a limited right to deduct VAT from its purchase and use.

According to the applicable regulations, if the motorcycle is used in a mixed manner (private and business), then the taxpayer may deduct 50% VAT on the purchase of the motorcycle and its use. The amended regulations from July 1, 2015 also allow for the deduction of 50% VAT on the purchase of fuel for motorcycles.

Motorcycle in the company with 100% VAT deduction

The introduced changes to the regulations now allow for the deduction of 100% VAT on the purchase and use of motor vehicles, then the vehicle (in this case a motorcycle) must be used only for business purposes. Indication that the motorcycle in the company will be used only for business purposes is associated with submitting the motorcycle to the tax office using the VAT-26 form, determining the rules of using the motorcycle in the company and keeping a detailed mileage test for VAT purposes. Only on this basis it will be possible to deduct 100% VAT from its purchase, fuel purchase and other expenses related to its operation.

VAT and protective clothing and helmets

To move safely on two-wheelers, the driver needs special clothing (gloves, boots, jackets, pants) and a helmet. According to the legislator, this type of purchase of motorcycle accessories is not directly related to the conducted business activity. Accordingly, these expenses are considered expenses for personal purposes. As a consequence, the taxpayer is not entitled to deduct VAT resulting from the invoice documenting the purchase of motorcycle accessories, due to the fact that these items are not related to the activities carried out subject to tax on goods and services.