You will deduct 50% VAT from the navigation to the passenger car


At the beginning of April 2014, the provisions on the right to deduct VAT on purchases and operating expenses related to motor vehicles, including passenger cars, were significantly modified. It is in their case that the taxpayer has the right to either a full or partial deduction of VAT.

Passenger cars - 50% VAT deduction

A full deduction of VAT on the purchase and use of a passenger car is possible after meeting four basic criteria:

  1. using the car only for business purposes,
  2. vehicle registration on the VAT-26 form at the appropriate tax office,
  3. keeping a detailed mileage test for VAT purposes,
  4. introducing the rules of using the vehicle in the company (preferably in the form of written regulations).

In a situation where the taxpayer wants to resign from unnecessary (in his opinion) paperwork or uses a passenger car for mixed purposes - private and business - then he is entitled only to a partial - 50% - deduction of VAT on expenses. The exception here is fuel, from which, according to the transitional provisions, an active VAT taxpayer cannot deduct VAT until June 30, 2015.


The non-deductible VAT on expenses related to the use of a passenger car in accordance with the position represented by the Minister of Finance may constitute a tax deductible cost, provided that the given expense is related to the conducted business activity, as provided for in Art. 22 sec. 1 of the PIT Act.

VAT deduction on navigation for passenger cars

If the taxpayer has submitted a passenger car to the tax office on the VAT-26 form and has met the other requirements for a full VAT deduction, then the taxpayer may deduct 100% of the VAT resulting from the purchase invoice from the purchase of GPS navigation for this vehicle.

On the other hand, when a passenger car is used for mixed purposes or a taxpayer voluntarily resigned from additional paperwork, then the entrepreneur who is an active VAT payer may deduct only part of the VAT - 50% of the input tax from the invoice from the acquired navigation.

The above rules also apply to such expenses as the purchase of a CB radio, car trunk or car rims.