Bike and scooter in sole proprietorship
Managing your own company - even a small, one-person business - often requires a lot of mobility. Entrepreneurs, when choosing their own means of transport, usually choose a car, rarely considering its alternatives (such as bicycles and scooters). And it's worth it - because the purchase of one of the more ecological vehicles may turn out to be really attractive. A bicycle and a scooter in a sole proprietorship? It is really possible!
A bicycle and a scooter in a sole proprietorship - can it be a cost?
One of the reasons why entrepreneurs do not consider purchasing a company bike or scooter as a sole proprietorship is the fear of questioning such an expense as a company cost. However, this is a question that can be easily dispelled.
Pursuant to the PIT Act, a tax-deductible cost may be an expense that serves to obtain income, or to secure or maintain a source of income. The obligatory exceptions that cannot constitute a corporate cost are included in Art. 23 of the Act.
The cost of purchasing a bicycle or scooter for the company is not on the list that is excluded from being included in company expenses. Therefore, as long as the entrepreneur is able to prove that the two-wheeler will be used as part of business activity, for example, for commuting to work, to customers, etc., there is nothing to prevent the expenditure incurred from becoming a tax deductible cost.
Interestingly, having a car in the company's fixed assets register does not exclude the possibility of purchasing a company two-wheeler. As long as it is possible to rationally justify the necessity to have both means of transport - e.g. due to the seasonal use of a bicycle or a scooter, the tax authorities should not raise any objections.
The method of recording the purchase of a scooter or bicycle to the company will depend on the initial value of the two-wheeler. If the expenditure does not exceed PLN 3,500, it is not necessary to enter it in the company's fixed assets register - it can be booked as one-off, up to the 13th column KPiR - Other expenses.
However, when the expenditure exceeds the amount of PLN 3,500, and the entrepreneur plans to use the purchased means of transport for a period longer than a year, then it will become a company's fixed asset. In the tax book of revenues and expenses, the cost will be recognized in the form of depreciation.
Bike and scooter in sole proprietorship and VAT
Entrepreneurs registered as active VAT payers on the purchase of a bicycle or scooter and related expenses may deduct VAT.
When it comes to the purchase of a bicycle, there are no regulations that limit the possibility of deducting VAT when purchasing a bicycle and from expenses related to it. Therefore, an entrepreneur who buys a bicycle for business purposes may deduct 100% VAT from related expenses.
While it is quite clear in the case of a bicycle, as it is difficult to classify it as a motor vehicle, in the case of a moped, doubts sometimes arise. However, based on the provisions of the Road Traffic Act and the interpretation of the tax authorities, it should be concluded that a moped is not a motor vehicle. A motor vehicle must be a motor vehicle, and in accordance with the above-mentioned by law, the moped is excluded from this group of vehicles.
Therefore, if the trader decides to choose a moped as a means of transport in his company, he can deduct all input VAT from it. Moreover, the restriction does not apply to the purchase of fuel for this type of vehicle.
Therefore, when deciding to purchase a means of transport for your company, it is worth considering whether a moped or bicycle will not be a better alternative to the car, or a profitable, seasonal supplement to it.