The right to a parking space - VAT
In many industries, the lack of parking space may mean that the taxpayer will have no customers. That is why entrepreneurs pay more and more attention to the possibility of parking. In addition, customers also choose entities that are easily accessible. Thus, taxpayers buy the real estate in which they operate, and more and more often also parking spaces. If there is no such possibility, they try to rent it. The right to a parking space and VAT settlement - we explain in the article.
VAT rate per parking space
Currently, more and more often parking spaces are sold together with a flat. They are usually located in the parking hall under the building.
Taxpayers very often buy flats where their offices are later located.
Example 1.
The taxpayer bought an apartment on the main street of Kalisz. The reason was the creation of an office in the apartment. He runs an accounting office and is often visited by clients who provide tax documents. Thus, together with the office, the taxpayer purchased the right to two parking spaces. What tax rate should be taxed on the purchase of the right to two parking spaces?
Pursuant to Art. 41 sec. 12 of the VAT Act, the tax rate of 8% applies to the supply, construction, renovation, modernization, thermal modernization or reconstruction of buildings or parts thereof included in the construction covered by the social housing program.
Construction covered by the social housing program is understood as residential buildings or parts thereof, excluding commercial premises, and residential premises in non-residential buildings classified in the Polish Classification of Construction Objects in section 12, as well as facilities classified in the Polish Classification of Construction Objects in class ex 1264 - only buildings of health care institutions providing accommodation services with medical and nursing care, especially for elderly and disabled people.
The construction covered by the social housing program does not include:
- single-family residential buildings with a usable floor area of more than 300 m2;
- residential premises with a usable area of more than 150 m2.
Thus, if the taxpayer purchased an apartment covered by the social housing program, the right to two parking spaces should also be taxed with a preferential tax rate of 8%. In this case, it does not matter that the apartment will be used as an accounting office in the future.
Deduction of VAT on purchases related to passenger cars
In the case of expenses related to motor vehicles, the amount of input tax is 50% of the tax amount resulting from the invoice received by the taxpayer.
Let us remind you that the expenses related to the above-mentioned motor vehicles include expenses related to:
- the acquisition, import or manufacture of these vehicles and the acquisition or import of their component parts;
- use of these vehicles on the basis of a rental, lease, leasing or other contract of a similar nature related to this contract, other than those listed in point 3;
- purchase or import of motor fuels, diesel oil and gas used to power these vehicles, repair or maintenance services and other goods and services related to the operation or use of these vehicles.
The above limitations do not apply when motor vehicles are used exclusively for the taxpayer's business activities.
Motor vehicles are considered to be used exclusively for the taxpayer's business if:
- the manner of using these vehicles by the taxpayer, in particular those specified in the rules of their use established by him, additionally confirmed by the vehicle mileage records kept by the taxpayer, excludes their use for purposes not related to business activity or
- the design of these vehicles precludes their use for non-business purposes or makes their non-business use irrelevant.
Vehicle mileage records are kept from the date of commencement of the use of the motor vehicle solely for the taxpayer's business activity until the date of termination of the use of the vehicle solely for this activity. Taxpayers who use motor vehicles only for business, for which they are required to keep a vehicle mileage record, are required to submit information about these vehicles to the head of the tax office within 7 days from the date on which they incur the first expenditure related to these vehicles (see Article 86a, paragraph 12 of the VAT Act).
Motor vehicles are motor vehicles within the meaning of road traffic regulations with a permissible total weight not exceeding 3.5 tons.
Thus, if the taxpayer has purchased a parking space and it will be used to park a company car there for mixed purposes, the taxpayer will be entitled to a tax deduction of 50%.
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The right to a parking space and the deduction of VAT
In economic practice, parking spaces are used by both the taxpayer and his clients.
Example 2.
The taxpayer who is an active VAT payer purchased the right to four parking spaces in the parking hall. It is located in the building where he has his offices. Both the cars of its employees and customers can park in the parking spaces. Is the taxpayer entitled to a deduction of VAT?
Yes, in this case he is entitled to a deduction of VAT in connection with the purchase of the right to four parking spaces.
The purchase of the right to parking spaces is related to the conducted business activity.
In this case, the taxpayer is entitled to deduct 100% of the VAT included in the invoice documenting the purchase of the right to four parking spaces. They are used by the taxpayer's employees and clients. Thus, it is impossible to determine who is parking where and where. Consequently, parking spaces are not used by the taxpayer to park a mixed car.
In conclusion, when buying a parking space, we are entitled to a deduction of input tax. In the event that they are used by our customers, we can deduct all tax contained in the invoice documenting the purchase of the right to these places.
