Sole Proprietorships Can Deduct Two Cars: One Gas, One Electric

A Polish entrepreneur can now deduct the costs of two company cars, even if they are a sole proprietor and one is a gasoline vehicle while the other is electric. The tax authorities have issued a favorable interpretation, confirming that there are no restrictions in the Personal Income Tax (PIT) law on the number or types of vehicles a business can utilize.

This development allows an entrepreneur to lease an electric car and deduct its payments as business expenses, even while already using a gasoline-powered car for their company. The tax interpretation, issued by the director of the National Revenue Information, supports the business use of both vehicles.

The entrepreneur in question runs a service business and pays a flat PIT rate. They currently use a gasoline car for client visits, service delivery, and operational support. However, they find the current vehicle expensive to maintain, particularly due to high fuel consumption in urban areas.

To address this, they plan to lease a second car, this time an electric one, and deduct the lease payments as business costs. The tax authority's positive stance was partly influenced by the goal of reducing business's negative environmental impact, making the leasing of an electric car acceptable even with an existing combustion engine vehicle.