Sale of a company car which is jointly owned by a spouse

A taxpayer conducting business activity may use his private property there. This possibility also applies to cars. In a situation where the vehicle is a joint property of the spouses, it may be transferred to the company property of one of them.

This fact does not mean that only one of the spouses becomes the owner of the vehicle. It is still joint property.

The method of determining the initial value of such a fixed asset is set out in Art. 22 g of paragraph 1. 11 from which it follows that if an asset is jointly owned by the taxpayer, the initial value of this asset is determined in the proportion of its value in which the taxpayer's share in the ownership of this asset remains; this rule does not apply to assets constituting joint property of the spouses, unless the spouses use the asset in separate economic activities.

Assuming that only one of the spouses runs a business, the value of the vehicle is 100% of the initial value of the fixed asset.

When deciding to sell a car of a fixed asset, will the income be only a part corresponding to the ownership interest of a person running a business? How to document such a transaction? Is this sale subject to VAT?

If the car could be depreciated from its full value. Consequently, the revenue obtained from the sale of this car will be entirely the revenue from the economic activity carried out by one of the spouses. The car will be sold as part of the company's assets. The taxpayer keeping the Tax Book of Revenues and Expenses should show the revenue from its sale in column 8 - other revenues.

However, when it comes to the issue of VAT, if the car was used for a minimum of 6 months and the taxpayer did not have the right to deduct the input tax upon its purchase, the sale of the car is subject to VAT exemption ("exemption" rate) pursuant to Art. 43 sec. 1 point 2 of the VAT Act.

As a rule, the entrepreneur should document the above transaction with an invoice.