A passenger car in a sole proprietorship (JDG) can be settled in several ways, and each gives a different result in PIT and in VAT. In 2026 three numbers are key: the value cap of the car depending on CO2 emissions (PLN 225,000, 150,000 or 100,000), 75% of operating costs for mixed use and 50% VAT deduction. Below we compare the variants, show an example of depreciation and the duties that entrepreneurs often learn of only during an audit.
Four ways to have a car in the business
| Variant | Costs in PIT | VAT |
|---|---|---|
| Private car, not entered into fixed assets | 20% of operating and insurance expenses | 50% from invoices for fuel and servicing |
| Car as a company fixed asset | depreciation up to the value cap + 75% or 100% of operation | 50% or 100% |
| Operating lease or long-term rental | instalments up to the value cap + operation | 50% or 100% from each instalment |
| Taxi rides, hourly rental | full cost of the transport service | under the general rules |
The regulations do not limit the number of cars in the company. A second car is fine if it actually serves the business and this can be shown — for example because one is used on trips to clients and the other by an employee. Each expense must have a link to revenue, so a vehicle sitting in the garage is hard to defend.
Car value limits in 2026
Article 23(1)(4) of the PIT Act limits the cost-deductible portion of depreciation write-offs to the car's value not exceeding:
- PLN 225,000 — for a car with an electric or hydrogen drive;
- PLN 150,000 — where the combustion engine emits less than 50 g CO2 per kilometre (according to the central vehicle register);
- PLN 100,000 — for combustion cars with CO2 emissions of 50 g/km or above.
The same split applies to leasing: the part of the instalment corresponding to the repayment of the car's value is a cost in the proportion in which the limit stands to the car's value. A separate limit of PLN 150,000 applies to voluntary insurance (AC) premiums — for a more expensive car only a proportional part of the premium is a cost. The previous limits apply only to cars entered in the fixed asset register before 1 January 2026; according to KIS, the new limits apply to operating lease instalments from 2026, even if the contract was concluded earlier.
Depreciation example
An entrepreneur who is an active VAT payer buys in 2026 a hybrid car with emissions of 120 g/km for PLN 160,000 net + PLN 36,800 VAT and also uses it privately. They deduct 50% of VAT, i.e. PLN 18,400; the other PLN 18,400 increases the initial value to PLN 178,400. The depreciation rate for passenger cars is 20%, so the annual write-off is PLN 35,680. Because the limit of PLN 100,000 applies, only part of the write-off is a cost: 35,680 × 100,000 / 178,400 = PLN 20,000 per year. If this were an electric car for the same amount, the whole write-off would fit within the PLN 225,000 limit.
For a used car entered into the register for the first time, an individual rate may be set — the depreciation period of a passenger car cannot be shorter than 30 months.
Mixed or exclusively business use
For a car also used privately, 75% of the expenses on its use (fuel, servicing, tyres, parking) are costs in PIT — the Act excludes 25% of such expenses from costs. In VAT, 50% of the tax from invoices related to the vehicle is deducted. The general rules of deduction are described in the article on VAT in Poland.
Full deduction (100% in PIT and in VAT) is possible when the car serves exclusively the business. The VAT Act then requires:
- rules for using the vehicle that exclude private use, confirmed by a mileage log (odometer reading, every trip, purpose, route);
- filing with the tax office the VAT-26 information no later than the 25th day of the month following the first expense on the car — a late filing takes effect only from the month of its filing;
- updating the information by the end of the month in which the way of using the car changed.
The PIT Act ties both taxes together: if the entrepreneur does not keep the mileage log required by the VAT provisions, the car is deemed to be used privately as well. For a sole trader with one car who also uses it to go shopping, the "100%" option is therefore in practice hard to defend.
Private car not entered into fixed assets
When the car remains in private assets but is sometimes used in the business, 20% of the expenses on its use and insurance are costs (including non-deductible VAT). This solution is simpler but less favourable than entering the car into the register of fixed assets. The value of a private car brought into the business is set at the purchase price, no higher than the market value, and where the purchase price cannot be established — at a valuation reflecting market prices.
Ryczałt and the flat tax — what changes
Under ryczałt (lump-sum tax on recorded revenue), costs, including depreciation of the car, do not reduce the tax. A ryczałt payer can, however, as an active VAT payer, deduct VAT from invoices concerning the car on the same terms as others. Under the flat tax (podatek liniowy) and the tax scale, costs work the same way; the difference concerns the tax rate and the health contribution. A comparison of forms of taxation is in the article on the 19% flat tax.
Sale of a company car
The sale of a car that was a fixed asset is revenue from the business. This also applies where the car was earlier withdrawn to private assets and no more than 6 years have passed from the withdrawal to the sale (counting from the first day of the month after the withdrawal). Under ryczałt such revenue is subject to a rate of 3%.
Since 2025, revenue from the sale of fixed assets and the corresponding costs are not taken into account when setting the base of the health contribution. On the tax scale and the flat tax the entrepreneur may voluntarily include them in the annual settlement — which can be beneficial where the sale resulted in a loss.
Environmental fee for emissions
A company using a combustion car uses the environment within the meaning of the Environmental Protection Law and is as a rule obliged to pay a fee to the Marshal's Office by 31 March for the previous year. The fee is not due if its annual amount does not exceed PLN 800, and where the fee for each type of use of the environment does not exceed PLN 100, the statement is not filed either. For one passenger car, the amounts are usually small, but it is worth calculating the fuel used once a year. A separate obligation is a report to the National Emissions Database, which the entity using the environment submits by the end of February for the previous year.
Most common mistakes
- deducting 100% of VAT without a mileage log and without VAT-26;
- overlooking the PLN 100,000 limit for combustion cars when calculating depreciation;
- booking 100% of fuel costs for a car used privately;
- selling the car "privately" shortly after withdrawing it from the business without showing the revenue.
How Good Balance can help
As part of simplified accounting, we enter the car into the register, calculate the depreciation taking the limits into account and monitor the proportions of costs and VAT deductions. We also advise on the choice between purchase, leasing and rental.