A car in the company 2026: leasing, 50% vs 100% VAT, buy-out

A car in the company is one of the questions most often asked in accounting firms. The Polish tax system sets a number of detailed limits for passenger vehicles and differences between operating leases, finance leases, purchase from your own funds and private use. From 2026 there are limits on the value of a car that depend on the drive and CO2 emissions: PLN 100,000 for petrol and diesel cars with CO2 emissions of at least 50 g/km, PLN 150,000 for emissions below 50 g/km and PLN 225,000 for electric and hydrogen cars. For lease contracts and cars entered in the register before 1 January 2026, the transitional rules of the amending act apply. We will check them for your contract.

This article compares all the practical options in specific numbers.

VAT: 50% or 100%

The basic decision for every passenger car: how much VAT to deduct.

50% VAT: mixed use

The default mode for passenger cars used partly for private purposes. Characteristics:

• 50% of the VAT deducted on purchase, lease, repairs and fuel
• No requirement to keep a mileage log
• No notification to the tax office
• Convenient, but less advantageous financially

For most owners of one-person businesses on the flat tax or the scale this is the right choice. The car is also used privately (even occasionally), and the administrative burden of a log would be out of proportion to the saving.

100% VAT: exclusively for the business

Deducting the full amount of VAT requires meeting strict conditions:

1. Rules of use of the vehicle exclusively for business purposes
2. A vehicle mileage log (Article 86a of the VAT Act): every journey with the date, purpose and number of km
3. A VAT-26 notification to the tax office within 7 days of the first expense
4. A real absence of private use: the car must not be parked at the owner’s home

There is no “fleet company” exception to the mileage log (Article 86a(4)–(7) of the VAT Act). Challenging the mileage log means the reversal of the 50% VAT deduction, with interest.

The PLN 100,000 / 150,000 / 225,000 limit: the effect on tax-deductible costs

The PIT Act (Article 23(1)(4)) and the CIT Act introduce a limit on the value of the car for the purposes of tax-deductible costs. From 2026:

• PLN 100,000: petrol and diesel cars with CO2 emissions of at least 50 g/km
• PLN 150,000: petrol and diesel cars with CO2 emissions below 50 g/km
• PLN 225,000: electric and hydrogen cars

The same system applies to leasing and insurance. Exceeding the limit means that part of the depreciation, lease instalments and third-party liability and comprehensive insurance premiums (OC/AC) is not a business cost. Example: a petrol or diesel car for PLN 240,000 net. With CO2 emissions of at least 50 g/km the proportion = 100,000 / 240,000 ≈ 41.7%, and we count only 41.7% of each lease instalment and each premium as costs. With emissions below 50 g/km the proportion = 150,000 / 240,000 = 62.5%.

A private car used in the business and not entered in the fixed asset register is treated differently: the cost is 20% of the expenses (Article 23(1)(46a) of the PIT Act). The “mileage allowance” as a cost in PIT has not existed since 2019. A mileage log is needed only to deduct 100% of the VAT (Article 86a of the VAT Act).

Operating lease vs finance lease

In Poland the operating lease dominates. It is simpler and more flexible.

| Feature | Operating lease | Finance lease | |-------|---------------------|---------------------| | Legal owner | The lessor | The lessee (the client) | | Depreciation | At the lessor | At the lessee | | Instalment = cost | Yes (in proportion to the limit) | Only the interest part | | VAT on the instalment | 50/100% as a service | In one go on receipt | | Initial payment | Cost (100%) | Part of the initial value | | Buy-out | Usually 1–20% of the value | Already in the contract | | Documents | Invoice for a service | Invoice for the supply of goods |

When operating

As standard, for one-person businesses and small companies. Flexibility (the option to swap after 2–3 years), a low initial payment, low instalments. The cost is entirely in the current tax result (in proportion to the car value limit).

When finance

For companies that treat the car as a long-term asset and want to depreciate it. Often for specialist cars (vans, mobile workshops). For an ordinary passenger car it makes sense less often, because the operating lease is simpler and similarly advantageous.

Buy-out from a lease: three scenarios

After an operating lease ends (usually 24–60 months) you face three options.

Scenario 1: buy-out for the company

The car becomes a fixed asset. Straight-line depreciation of 20% a year (the rate for passenger cars), but up to the car value limit (PLN 100 / 150 / 225 thousand). You include the buy-out value in tax-deductible costs over 5 years.

Who it is for: companies that want to keep using the car in the business and run long operating cycles.

Scenario 2: buy-out as a private person

The car becomes your private property. There is no business cost after the buy-out. But note:

• The sale of a car bought out of an operating lease is revenue from the business, even after it has been moved to private assets, if 6 years have not passed from the first day of the month following the month it was withdrawn from the business to the day of sale.

Who it is for: owners who end the lease with a low buy-out (1–5% of the value) and swap the car for a new one. Here a private buy-out with an immediate sale at the market price generates a “profit” on the sale, which has to be taxed.

Scenario 3: not buying out

The car goes back to the lessor, with no further obligations. Sensible when you do not want to continue using it.

An electric car: a higher limit

For electric and hydrogen cars the limit on tax-deductible costs is PLN 225,000, which means most available models (Tesla Model 3, ID.4, e-Niro, BMW i4) fit entirely within it.

In addition:

• Free use of a company electric or hydrogen car by an employee for private purposes is valued at PLN 250 a month (Article 12(2a)(1)(b) of the PIT Act). It is not PLN 0
• Full VAT deduction requires a vehicle mileage log also for an electric car and also in companies with a fleet (Article 86a(4)–(7) of the VAT Act)
• Lower running costs: electricity vs fuel

A comparison in numbers: sole trader, flat tax

We assume (an illustrative example): a one-person business on the 19% flat tax, a health insurance contribution of 4.9%, a 48-month operating lease, a petrol or diesel car within the limit (PLN 100,000 net, CO2 emissions of at least 50 g/km), and an assumed instalment of PLN 2,300 net.

| Item | Operating lease | Purchase for cash | |---------|---------------------|---------------------| | Monthly outlay | Instalment PLN 2,300 net | Full price in one go | | Annual cost in tax-deductible costs | PLN 27,600 (instalment) + PLN 5,000 (fuel, running costs) | PLN 20,000 depreciation + PLN 5,000 running costs | | PIT saving (19% + 4.9%) | ≈ PLN 7,800 / year | ≈ PLN 6,000 / year |

An operating lease usually gives a higher annual tax cost and better cash flow (you do not freeze funds).

Summary

A car in the company is a multi-layered decision: VAT (50/100%), the form of financing (operating lease / finance lease / cash), the car value limit (PLN 100 / 150 / 225 thousand) and the buy-out strategy. A mistake at any step can cost several thousand zloty a year. If you are considering buying or replacing a car, contact us and we will compare the options on your numbers. We help clients with every such decision as part of the revenue and expense ledger (KPiR) service. You can read more about costs in a sole trader business in the article What to put in the costs of a sole trader business: a checklist of 50 items.

Sources: podatki.gov.pl, the PIT Act (consolidated text, Journal of Laws 2026, item 592: Article 12(2a), Article 23(1)(4) and (46a)), the CIT Act, the VAT Act (Article 86a).