The lump sum paid is subject to income tax

Employees often use private cars in their work. However, it should be remembered that the lump sum in connection with the costs incurred by the employee in connection with such use will not always be exempt from taxation on the part of the employee.

Art. 21 sec.1 point 23b of the Income Tax Act states that income tax free is the reimbursement of costs incurred by the employee for the use of vehicles owned by the employee, for the purposes of the workplace, in local driving:

• if the obligation to bear these costs by the workplace or the possibility of granting the right to reimbursement of these costs results directly from the provisions of other acts
• up to the amount of a monthly lump sum or up to the amount not exceeding the amount determined using the rates for 1 kilometer of the vehicle mileage, specified in separate regulations

To sum up, this exemption applies only to local trips and individual employee groups - postmen, social workers, employees of the Forest Service.

Other employee groups using their private car for business purposes are not exempt, which means that the reimbursed costs will be subject to income tax.