In relation to the amendment of the personal income tax act, from January 1st 2015 the new principles for determination of income on account of usage of company car for private purposes are applied. As a result of the amendment, the value of employee’s monthly income from this title will depend exclusively on the size of the engine of used company car. Introduction of new provisions is a consequence of numerous problems associated with settlement of income in this area in the past.
The legislator by introducing the new provisions to the personal income tax act, that is by art. 12 sec. 2a, 2b and 2c, set out the monetary value of gratuitous benefit entitled to the employee on account of usage of company car for private purposes in the amount of:
- 250 PLN per month – for cars with engine capacity up to 1600 cm3;
- 400 PLN per month – for cars with engine capacity above 1600 cm3.
In the case of usage of company car for private purposes for part of the month, the value of benefit is determined for each day of usage of a car for private purposes in the amount of 1/30 of abovementioned values.
Additionally, when the benefit entitled to the employee is partly paid, employee’s income is determined as the difference between abovementioned amounts and payment paid by the employee.
The new principles will impact on both the natural person who are employees and entrepreneurs who enable their employees to use company cars for private purposes.
If you would like to discuss the issue further, please feel free to contact us.
Contact: Maciej Górski Tax Advisor