Restrictive VAT Interpretation for Sole Proprietors Using Cars for Business and Personal Purposes

• Tax authorities do not allow a one-person business to deduct 100% VAT from a car and fuel
• The tax office believes that if a vehicle is parked at home, it will also be used for private purposes
• This strict stance on VAT deduction for cars and fuel discriminates against small business owners
• The interpretation by tax authorities limits VAT deduction to 50% for those using the car for both business and private purposes
• The issue particularly affects one-person businesses whose office is often at their residence
• The tax office’s interpretation is seen as illogical and contrary to VAT laws
• A recent case involved an IT professional running a one-person business from home wanting to lease a car for business purposes
• The professional plans to create rules prohibiting the use of the car for private purposes and keep a detailed record of its usage

Source: prawo.pl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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