Car tires at company costs
Entrepreneurs often use at least one car in their companies. Depending on the needs and business profile, there may be many more of them. Their use for company purposes involves various operating costs, ranging from fuel, through car tires, to a car wash or repairs.
Car tires as a tax cost
As is clear from the regulations contained in Art. 22 sec. 1 of the Personal Income Tax Act, tax deductible expenses may be those expenses that serve to generate revenue or maintain or secure their source, with the exception of the costs listed in Art. 23.
Thus, the basic criteria for including the expenditure on the purchase of car tires in the costs are its economic justification and the relationship with revenues from economic activity.
Car tires - settlement directly in company costs
In a situation where the car is a company's fixed assets or is used under a leasing contract, the expenses for the purchase of new tires, both summer and winter tires, will be a tax expense that the taxpayer can recognize directly in the tax revenue and expense ledger. The appropriate column to show the expense will be the column 13 of the ledger - other expenses.
An active VAT payer, when purchasing car tires, is entitled to a partial (50%) or full VAT deduction, depending on the technical conditions of the vehicle, additional tests and the purpose of its use. You can read more about this in the article: Car in the company - changes in VAT after April 1, 2014.
Car tires up to the mileage limit
In a situation where the entrepreneur uses his private passenger car as part of his business, in accordance with Art. 23 sec. 1 point 46 of the Personal Income Tax Act, he is obliged to keep mileage allowance. The costs incurred for the purchase and replacement of car tires and other operating expenses may be deducted by the taxpayer only up to the amount resulting from the mileage.
Vehicle mileage records kept for income tax purposes should contain at least the following data:
- surname, first name and address of the person using the vehicle,
- Vehicle registration number,
- engine capacity,
- next entry number,
- date and purpose of departure,
- description of the route (where from - where to),
- the number of kilometers actually traveled,
- the rate for 1 km of mileage,
- the amount resulting from the multiplication of the number of kilometers actually traveled and the rate for 1 km of mileage,
- signature of the taxpayer (employer) and his data.
The rates for 1 km of passenger car mileage are as follows:
Interestingly, in the case of a private passenger car also used for business purposes, the taxpayer has the right to a 50% deduction of VAT on operating expenses (also on car tires). The exception to the rule is the purchase of fuel, as the taxpayer cannot deduct VAT from it until the end of June 2015. The right to partial VAT deduction on fuel in such cases will come into force on July 1, 2015.