VAT deduction for company cars in Poland: when mileage records may no longer protect your business

A 100% VAT deduction for a company car in Poland is defensible only when the vehicle is used exclusively for VAT-taxable business activity and the company can prove it. VAT-26, accurate mileage records and enforced rules excluding private use must form one evidence system. Tax authorities may compare company records with automatic number plate recognition data, including ANPRS. Unexplained discrepancies may reduce the deduction to 50%, trigger VAT arrears and interest, and create fiscal penal exposure.

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When is a 100% company car VAT deduction available?

The general rule for passenger vehicle expenses is a 50% VAT deduction. Full deduction requires formal compliance and actual exclusive business use. The company should:

• file VAT-26 for the vehicle,
• keep current mileage records showing routes, trip purposes and odometer readings,
• implement rules that genuinely prevent private journeys.

A written policy is insufficient if access to the car, key custody, parking and actual routes are not controlled.

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Why may mileage records no longer be enough?

The Polish tax administration may compare a taxpayer’s documentation with data from IT systems. ANPRS identifies vehicles through registration plates captured by cameras. If external data places a car elsewhere than the mileage log indicates, the tax office may request explanations.

Typical risk indicators include:

• a company car appearing at a tourist destination at the weekend,
• camera data showing a different route from the mileage log,
• regular parking at an employee’s or board member’s home,
• no entry for a journey visible in external data,
• a fleet policy that is not enforced.

Even one private journey may indicate that the vehicle was not used exclusively for business. The correction period depends on the facts, evidence and when the use changed.

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What are the VAT-26 deadlines in Poland?

VAT-26 must be filed by the 25th day of the month following the month of the first vehicle-related expense, but no later than the date on which the VAT records are submitted. A change in use must be reported by the end of the month in which it occurred.

If filed late, exclusive business use is recognised only from the first day of the filing month.

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When is a 50% deduction safer?

The mixed-use model should be considered when the car is parked at a user’s home, driven outside working hours, shared by several employees, occasionally used privately or not subject to reliable route controls. A smaller tax benefit may be preferable to a position the company cannot defend.

If full deduction is challenged, the company may have to repay the difference between 100% and 50% VAT deduction, plus interest. It may also need to provide mileage logs, invoices, vehicle policies and evidence supporting individual trips.

A VAT compliance review should test VAT-26 filing, route consistency, access controls, unusual journeys and signed user declarations. Foreign-owned companies should also verify that global fleet policies meet Polish VAT requirements.

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If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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