Home Parking Does Not Automatically Prevent Full VAT Recovery on Company Cars

Summary

• The Polish tax administration reportedly accepted that parking a company vehicle at an employee’s residence does not, by itself, eliminate the right to deduct 100% of related input VAT. The position follows a series of court decisions rejecting an automatic assumption that home parking necessarily means private availability.
• Full recovery remains conditional on objectively excluding private use. Businesses must maintain credible vehicle-use rules, mileage records and the required VAT-26 notification. GPS monitoring, route controls, fuel reviews and enforceable restrictions can provide supporting evidence, but purely formal policies may be insufficient.
• The development is important for businesses employing mobile workers, sales representatives and field-service personnel. Companies should not treat the reported interpretation as an unrestricted safe harbour. Instead, they should document why home parking is operationally necessary and demonstrate how private journeys are prevented and monitored.

Article

The Polish tax administration appears to be softening its historically restrictive approach to company vehicles parked at employees’ homes. The reported position recognises that home parking does not automatically prevent a business from deducting 100% of the VAT on leasing, fuel, repairs and other vehicle-related costs.

Under Article 86a of the Polish VAT Act, the default input-VAT deduction for expenditure connected with passenger vehicles is generally limited to 50%. Full deduction is available where the vehicle is used exclusively for the taxpayer’s business and the arrangements governing its use, supported by mileage records, objectively exclude non-business use. A VAT-26 notification is also required. [eporady24.pl], [poradnikpr…ebiorcy.pl]

Historically, the tax authorities often argued that keeping a vehicle at an employee’s residence created an opportunity for private use. Courts have taken a more fact-sensitive position. For example, a reported May 2025 judgment of the Regional Administrative Court in Łódź found that home parking did not preclude full recovery where the business maintained mileage records, GPS monitoring, a vehicle-use policy and a formal prohibition on private journeys. [chandonwaller.pl]

The emerging approach is commercially relevant to organisations with mobile employees who travel directly from home to customers or remote work locations. Requiring those employees to collect and return vehicles at a central business location may be inefficient and may itself generate unnecessary journeys.

Nevertheless, the burden remains on the taxpayer to demonstrate exclusive business use. A written prohibition that is neither monitored nor enforced may not be sufficient. Businesses should be able to explain the operational reason for home parking, identify authorised drivers, reconcile mileage with business appointments and investigate unusual journeys or fuel consumption.

Controls may include GPS monitoring, periodic mileage checks, restrictions on use outside working hours, documented approval for exceptional journeys and disciplinary consequences for private use. The precise control framework should remain proportionate and should comply with employment and privacy requirements.

Businesses currently applying the 50% restriction may wish to assess whether their facts and controls could support full recovery. Those already deducting 100% should test whether actual practice is consistent with the vehicle policy and supporting records.

Source Links

• Rzeczpospolita: Home parking does not exclude full VAT deduction
• Analysis of Polish court and administrative practice
• Commentary on the Łódź administrative court judgment

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