Use of company cars can constitute a hidden profit, Poland’s top administrative court rules

A company car can produce a hidden profit for tax purposes even when the person using it is simultaneously an employee, management board member and shareholder, Poland’s Supreme Administrative Court has ruled.

The judgment, issued on June 3, 2026, concerned a company taxed under the Estonian corporate income tax regime. Its management board members were also employees and shareholders, and the company provided them with business cars without keeping mileage records.

The company had sought an individual tax interpretation. It argued that the vehicle expenses should not fall within the definition of hidden profits under Article 28m of the Corporate Income Tax Act because the cars were provided for employees carrying out official duties, not for the recipients as shareholders.

The company also maintained that the fact that the beneficiaries held shares was irrelevant. In its view, there was no connection between the benefit and the right to participate in the company’s profits, which it considered an essential condition for treating the expense as hidden profit.

The court’s ruling means that holding all three statuses does not by itself exclude that classification. The judgment addresses how benefits connected with company cars may be treated under the Estonian corporate tax system when the users also possess shareholder rights.