Companies can only claim 50% of the VAT paid on combustion engine passenger car purchases under Polish tax regulations.
VAT Input Tax Reduction
According to Article 86(1) of the VAT Act, taxpayers are entitled to reduce the amount of VAT payable by the amount of input tax, to the extent that goods and services are used for taxable activities.
General Rule for Input Tax
Generally, the amount of input tax constitutes the sum of VAT amounts resulting from invoices received by the taxpayer for the acquisition of goods and services (Article 86(2)(1)(a) of the VAT Act).
Special Rule for Motor Vehicles
In the case of expenditures related to motor vehicles, the amount of input tax constitutes 50% of the VAT amount from the invoice received by the taxpayer (Article 86a(1)(1) of the VAT Act).