The head of the Tax Chamber in Katowice, in its tax ruling of February 2, 2015 (case file number IBPBII/1/415-905/14/ MZ) confirmed that a manager or an executive who received a company car to duly perform his/her professional duties does not receive income from driving the company car from its parking place to his/her place of work and back.
The provisions binding from January 1, 2015 provide for an amount of a free-of-charge benefit to which an employee is entitled for using a company car for private purposes. The amount depends on the engine capacity and is as follows:
- PLN 250 per month for vehicles with an engine capacity of up to 1600 cm.
- PLN 400 per month for vehicles with an engine capacity above 1600 cm.
The purpose of these changes was to simplify the manner of use of company cars for private purposes was settled, however, although these changes constitute a step in the right direction, they do not solve all the problems related to this particular issue. The settlement of expenses for fuel during private journeys raises one of many such doubts. Please note that the tax rulings allow to recognize a journey on the home-workplace and back run as a business journey. This is the case if an employer requires the employee to garage the company car close to his/her place of residence.
Similarly, if the nature of the employee’s obligation shows that the employee travels to his/her place of work directly from his/her place of residence (e.g. sales representatives).
The tax ruling issued by the Tax Chamber in Katowice after the new provisions became effective confirms the present line of interpretation.
According to this interpretation, the trips from a place of garaging (e.g. a garage, guarded parking place or other) situated next to a place of residence to a place of work and back taken by the assigned company car, as required by the nature of the work, shall not constitute an employee’s income from the employment relationship on condition that the said trips are made solely for business purposes and do not constitute exclusively a form of paying for the employee’s journey to and from work. The said journeys are made to satisfy a business objective such as care for the entrusted company property expressed in the form of the employer’s rules by parking a company car in a place ensuring its safety and, in view of the business tasks involved, and the permanent readiness (mobility) to perform professional duties.
As a side issue, please note that in the discussed case the rules of using company cars were specified in the company’s internal regulations and the agreements specifying the use of company cars. The said documents impose on employees a number of obligations and regulate the rules of responsibility. In view of the complexity of the issues relating to the use of company cars for private purposes, internal corporate policy is, in our view, recommended.