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

Under Polish VAT law, 100% VAT deduction for a company car is safe only when the vehicle is genuinely used exclusively for VAT-taxable business activity and the company can prove it with consistent documentation. For passenger cars, the key safeguards are timely VAT-26 filing, reliable mileage records and internal rules that effectively exclude private use.

The risk has increased because Polish tax authorities may compare a taxpayer’s records with data from automatic number plate recognition systems, including ANPRS. If the vehicle’s actual routes do not match the mileage log, the tax office may challenge the 100% VAT deduction, assess VAT arrears, add default interest and, in more serious cases, consider fiscal penal liability.

VAT deduction for company cars in Poland has become a higher-risk area for businesses using passenger vehicles, leased cars or larger fleets. The difference between deducting 50% and 100% VAT can be material, especially where vehicles generate recurring costs for leasing, fuel, servicing, insurance and day-to-day operation.

For foreign-owned companies, the issue is not only whether the accounting treatment is formally correct. The practical question is whether the company can prove, under Polish tax rules, that a vehicle declared for full VAT deduction was not available for private use.

---

Why has company car VAT deduction in Poland become more urgent?

Company car VAT deduction has long been an area closely reviewed by the Polish tax authorities. The financial benefit of a 100% deduction can be significant, but so is the evidential burden.

The new risk comes from the growing analytical capacity of the Polish tax administration. Tax authorities may compare the data shown in the taxpayer’s vehicle mileage records with information from IT systems, including automatic number plate recognition systems.

In practice, journeys made by a vehicle declared for 100% VAT deduction may be checked against the company’s own records. If the mileage log shows a business trip, but external data places the vehicle in a different location or at a different time, the tax office may ask the company to explain the discrepancy.

This is an important shift for companies operating in Poland. A mileage record that is formally maintained may not be enough if it does not reflect the real use of the vehicle.

---

Can a company deduct 100% VAT on a company car in Poland?

Yes, but only if both formal and factual conditions are met. As a rule, expenses related to motor vehicles are subject to a 50% VAT deduction. A full deduction requires the taxpayer to demonstrate that the vehicle is used exclusively for business activity.

In practice, the company must manage three areas:

Requirement	What it means in practice	Risk if missing
VAT-26	Reporting the vehicle as used exclusively for business activity	Limitation of the right to full VAT deduction
Vehicle mileage records	Ongoing documentation of routes, trip purposes and odometer readings	The mileage log may be challenged as unreliable
Vehicle use rules	Internal policy, key handover procedure and private-use ban	Argument that private use was not effectively excluded

Full VAT deduction is therefore not just an accounting choice. It is an ongoing evidential obligation that the company must maintain throughout the entire period of vehicle use.

---

What is ANPRS and why does it matter for VAT in Poland?

ANPRS refers to an automatic number plate recognition system. It enables vehicles to be identified based on registration plates captured by cameras. Systems of this type may be used by public authorities to analyse vehicle movements and compare them with other data held by public bodies.

From a Polish VAT perspective, the significance of ANPRS is that a journey made by a vehicle declared for 100% VAT deduction may be verified independently of the company’s internal documentation. If location data is inconsistent with the mileage records, the tax office may ask the taxpayer to explain the purpose of the journey.

For the taxpayer, the conclusion is clear: vehicle mileage records must reflect the actual use of the car. If a vehicle appears in a place or at a time that cannot be reasonably linked to business activity, the 100% VAT deduction may become a point of dispute with the Polish tax authority.

---

What can the Polish tax office check when reviewing a company car?

A review does not always begin with a formal tax audit or tax proceedings. In practice, the tax office may first request explanations as part of preliminary verification activities.

Such a request may concern specific journeys that were not included in the mileage records or where the business purpose is unclear. If route data is inconsistent with company documentation, the taxpayer should be ready to explain who used the car, why the trip took place and how it related to business activity.

The most common problem areas include:

Situation	Why it is risky
A company car appears in a tourist destination at the weekend	The tax office may ask about the business purpose of the trip
The mileage log shows a different route than camera data	The documentation may be considered unreliable
The vehicle is regularly parked at the private address of an employee or management board member	This may suggest availability for private use
There is no mileage entry for a journey shown in external data	This raises the question of whether records were maintained on an ongoing basis
A vehicle policy exists, but the company does not enforce it	The document alone does not exclude actual private use

Companies with fleets used by sales teams, management board members, regional managers and employees travelling between branches are particularly exposed.

---

Does private use of a company car remove the right to 100% VAT deduction?

Yes. Private use of a company car conflicts with the condition for full VAT deduction. Even a single private journey may be used as an argument that the vehicle was not used exclusively for business activity.

This does not mean that every error in one mileage entry automatically invalidates several years of VAT settlements. The scale of any correction depends on the circumstances, the period involved, the available documentation and whether the company can show when the way the vehicle was used actually changed.

A conservative approach is usually safer. If the company allows even occasional private use, it should consider the mixed-use model and a 50% VAT deduction.

---

VAT-26 in Poland: when must the form be filed?

VAT-26 is the information form for motor vehicles used exclusively for business activity.

The VAT-26 form must be filed by the 25th day of the month following the month in which the first expense related to the vehicle was incurred, but no later than the date on which the VAT records are submitted. If the way the vehicle is used changes, the update must be filed no later than by the end of the month in which the change occurred.

If the taxpayer does not file VAT-26 on time, the vehicle is treated as used exclusively for business activity only from the first day of the month in which the information was filed.

---

50% or 100% VAT deduction for a company car in Poland?

In practice, the choice between 50% and 100% VAT deduction should not depend only on the size of the tax benefit. The key question is whether the company can genuinely exclude private use of the vehicle and prove this during a review.

The 50% VAT deduction model is easier to manage. It is usually appropriate where a car may also be used privately, for example by a management board member, an employee or a person who parks the vehicle at home. In this model, the company generally does not need to keep detailed mileage records for the purpose of full VAT deduction or file VAT-26.

The full 100% VAT deduction is more tax-efficient, but it requires significantly greater documentation discipline. The company must prove that the vehicle is used exclusively for business activity. In practice, this means filing VAT-26, keeping vehicle mileage records and implementing usage rules that exclude private journeys.

For this reason, 100% VAT deduction works best for vehicles assigned to specific business tasks, with clearly defined access and route control. If the car is used flexibly, by several people or outside standard working hours, the safer option may be a 50% VAT deduction.

---

What are the consequences of incorrect VAT deduction?

If the Polish tax office challenges the full VAT deduction, the company may have to correct its VAT settlements. In practice, this usually means paying the difference between the 100% and 50% VAT deduction for the period under review.

Default interest may also be added. The longer the correction period, the higher the total cost for the business, especially where high-value vehicles, leasing arrangements or large fleets are involved.

The proceedings themselves also create an operational burden. The company must prepare mileage records, invoices, vehicle use policies, documents confirming the business purpose of journeys and explanations from the individuals who used the vehicle.

In more serious cases, the tax office may also review whether the vehicle was correctly declared for full VAT deduction in the first place. If the documentation was unreliable or showed exclusive business use despite private journeys, fiscal penal liability may also become a risk.

---

How should a company prepare for a VAT deduction review?

The best protection is not the mileage log alone, but a coherent evidence system. The documents should show that the company genuinely restricted the possibility of private use.

Checklist for accounting teams and management boards

Area	What to check
VAT-26	Whether it was filed on time and whether the vehicle data is up to date
Mileage records	Whether entries are complete, current and consistent with invoices, calendars and assignments
Vehicle policy	Whether it clearly excludes private use and defines the user’s responsibility
Vehicle access	Who keeps the keys, where the car is parked and who is allowed to drive it
Unusual routes	Whether weekend, evening and holiday-period journeys have a business justification
Leasing and fuel	Whether invoices correspond to the actual use of the vehicle
Employees and management board	Whether users have signed the vehicle use rules

In foreign-owned companies, it is also important to check whether local vehicle policies are aligned with Polish VAT requirements. A global fleet policy may not be sufficient evidence for a Polish tax office.

---

When should a company give up 100% VAT deduction?

Giving up full VAT deduction may be reasonable when the actual vehicle use model does not match Polish tax requirements.

A 50% VAT deduction should be considered where:

• the car is assigned to a management board member and parked at their home,
• the vehicle is used outside working hours,
• the company does not control routes and vehicle access,
• employees occasionally use the car privately,
• mileage records are completed with a delay,
• the company does not want to carry the evidential risk during a tax review.

In this situation, a lower tax benefit may be better than a 100% VAT deduction based on documentation the company cannot defend.

---

What should companies do now?

Companies deducting 100% VAT on company cars in Poland should carry out a short documentation audit. The first step is to check whether VAT-26 was filed correctly, whether the mileage records are complete and whether the vehicle policy is more than a formal document.

If private journeys have occurred, or if the company cannot prove exclusive business use, it may be worth analysing a VAT correction and changing the deduction model to 50%.

Support in this area may require both accounting services in Poland and tax services in Poland. getsix® can assist with VAT documentation reviews, tax risk assessment and the preparation of procedures that reflect the actual use of company vehicles.

***