Your Polish Business: Deducting Private Car Costs (75% Rule)

Running a Jednoosobowa Działalność Gospodarcza (JDG) in Poland often involves using your personal vehicle for business tasks. A common question for foreign entrepreneurs is how much of these car expenses can be deducted. If you use your private car for both business and personal purposes – known as 'mixed use' – you can generally deduct 75% of the related costs. This applies to a wide range of expenses, including fuel, insurance, servicing, and even leasing payments, simplifying the accounting for vehicles that serve a dual purpose in your Polish business operations. However, if your goal is to deduct a full 100% of these car expenses, the requirements are significantly stricter. This higher deduction is exclusively reserved for vehicles used *only* for business activities. To qualify for the 100% deduction, you must meticulously maintain a mileage log (ewidencja przebiegu) detailing every business journey, and crucially, you need to submit a VAT-26 form to the tax authorities. Without meeting both these stringent conditions, the deduction reverts to the standard 75% for mixed-use vehicles, even if your primary usage is for work. Understanding this distinction is vital for accurate financial planning and avoiding common pitfalls when managing your PIT and VAT obligations. Many entrepreneurs find the 75% rule a practical compromise, as maintaining a comprehensive ewidencja przebiegu and submitting VAT-26 can be time-consuming, especially for those new to the Polish tax system. Even with the 75% deduction, it's essential to keep accurate records of all your car-related expenses to justify your claims during potential tax audits. Proper documentation ensures you're compliant and can confidently manage your business finances. Navigating these specific Polish tax regulations, from ZUS contributions to KSeF invoicing and expense deductions like these, can feel overwhelming for foreigners. That's where a tool like Rozlio comes in. We help simplify the complexities of managing your Polish business finances, ensuring you correctly track expenses, calculate your PIT and VAT, and stay compliant with all local requirements. Let Rozlio take the guesswork out of your financial management, so you can focus on growing your business with peace of mind.