A Car in a JDG in 2026 — PIT, VAT Costs and Limits in Poland

Entrepreneur's private car: 20% of the cost

If a passenger car belongs to the entrepreneur but has not been entered into the register of fixed assets, the costs generally include 20% of expenses related to the use of the car and insurance premiums.

The old PIT mileage report based on per kilometer rates is no longer used to settle an entrepreneur's private car.

Used company car: 75% of the cost

If the car is a fixed asset or is used on the basis of leasing, rental or similar agreement and is also used privately, the costs generally include 75% of operating expenses, for example:

• fuel and charging,
• service and parts,
• car wash,
• parking and highway fees.

The cost basis is the net amount plus VAT, which the taxpayer did not deduct.

The 75% limit does not automatically cover all insurance premiums. The insurance has separate rules, including a limitation on the value of the car with AC.

Company car only: 100% of operating costs

Full recognition of operating expenses requires using the car exclusively for business purposes. If the taxpayer is obliged to keep mileage records for VAT purposes, the lack of such records results in the presumption of mixed use and the 75% limit for PIT purposes.

You need to check separately taxpayers exempt from VAT and vehicles for which the VAT Act does not require records. Not in every case, the lack of VAT-26 or mileage records determines the result in the same way.

VAT: 50% for mixed use

An active VAT payer generally deducts 50% of VAT from expenses relating to a passenger car used for business and private purposes, including:

• purchase,
• fuel,
• service and parts,
• leasing and rental.

Insurance premiums are often exempt from VAT, so they should not be described as a standard expense with a 50% tax deduction.

VAT: 100% for company use only

Full deduction requires that the design or use of the car excludes private purposes. For a typical passenger car this usually means:

1. establishing the rules for using the vehicle,
2. keeping mileage records for VAT,
3. timely VAT-26 declaration,
4. actual compliance with exclusive corporate use.

The entrepreneur's declaration alone is not sufficient if private use remains possible.

Mileage records: when you need them

Kilometer tax at the rates of PLN 0.89 or PLN 1.15 per kilometer is no longer used to calculate the cost of the JDG owner's private car.

Mileage records are still important, among others:

• with full VAT deduction for a typical passenger car,
• with 100% of operating costs in PIT,
• in settlements of the use of an employee's private vehicle for business purposes, according to separate rules.

These three situations should not be combined into one "mileage".

Depreciation and limits in 2026

For passenger cars entered into the register of fixed assets from January 1, 2026, the deduction limit depends on the drive and CO₂ emissions:

• PLN 225,000 — electric or hydrogen vehicle,
• PLN 150,000 — combustion vehicle with emissions below 50 g/km,
• PLN 100,000 — combustion vehicle with emissions of at least 50 g/km.

If the value of the car exceeds the appropriate limit, the part of the write-off corresponding to the surplus is not an expense. For a car entered into the register before January 1, 2026, you need to check the transitional regulations; the new limit does not automatically apply just because the write-off falls in 2026.

Leasing and rental

In operational leasing, the limit applies to the part of the fee constituting the repayment of the car's value. The entire installment including the financial part is not automatically limited.

The value used for the proportion also includes VAT, which cannot be deducted by the taxpayer.

The buyout is a separate purchase. The initial value, the right to VAT, the threshold of PLN 10,000 and the appropriate car limit need to be re-established.

Insurance

• Third party liability insurance is settled according to the rules applicable to the method of use and ownership of the car,
• AC is subject to the proportion of the vehicle's value to a fixed limit of PLN 150,000 (Art. 23 sec. 1 item 47 PIT) — regardless of CO₂ emissions; the AC limit is separate from the depreciation limits,
• in the case of a private car not entered into the register, premiums are subject to a limit of 20% together with expenses for use.

If the value adopted for AC exceeds the appropriate limit, an appropriate part of the premium is included in the costs. 75% should not be mechanically applied to every type of insurance.

Lump sum

On a lump sum basis, car costs do not reduce income tax. However, an active VAT payer may deduct VAT according to the 50% or 100% rule if the expense is used for taxable sales.

A taxpayer exempt from VAT does not deduct input tax just because the car is used in the company.

The most common errors

1. Settlement of the owner's private car with the old mileage instead of the 20% limit.
2. Applying 75% to all insurance.
3. 100% VAT deduction without excluding private use.
4. Applying one limit of PLN 150,000 to each car.
5. Limiting the proportion of the entire leasing installment.
6. Omitting undeducted VAT from the cost base.
7. Deduction of PIT costs on a lump sum basis.
8. Recognition of redemption as an automatic one-time cost.

Sources

• Podatki.gov.pl — company car
• PIT Act — text in ISAP
• VAT Act — text in ISAP

Do you need to settle your car in a JDG?

Oxyok records fuel, leasing, depreciation, insurance and VAT. Accounting costs from PLN 49 + VAT per month.

Write to Paweł or see Oxyok accounting.

The material is of a general nature. The result depends on ownership, use, contract, VAT and emissions of the vehicle.