Good news for employers who provide employees with company cars that can be used for private purposes. According to the general ruling no. DD3.8201.1.2020 of 11/09/2020, the fuel costs financed by the employer who provide the employee with a company car for private use are included in the employee’s flat-rate income for the use of the company car.

In order to simplify the method of calculating the value of a free or partially paid benefit related to making a car available also for private purposes of an employee, the legislator introduced a flat-rate form of determining its value, which was determined monthly as

1) PLN 250 per month – for cars with an engine capacity of up to 1600 cm3,

2) PLN 400 per month – for cars with an engine capacity of more than 1600 cm3.

So far, the tax office in the issued individual interpretations took the position that the lump sum amounts include the costs of using the car, such as: insurance, ongoing repairs and inspections, with the exception of fuel, to which the principles of determining the income provided for in Art. 11 sec. 2 and paragraph 2a point 4 of the PIT Act should be used, which would mean the need for the employer to separately determine the value of financial fuel in order to tax it, which would significantly complicate the method of settlements.

In the issued general interpretation, the Minister of Finance stated that the lump-sum value of the free benefit covers the costs incurred by the employer related to the maintenance and general use of the car, for example: fuel, insurance, tire replacement, current repairs, periodic inspections, which must be incurred for the car to be operational and able to participate in road traffic.

It is worth noting that additional types of costs such as parking fees or on the motorway, in accordance with the position of the Minister of Finance, are not covered by the lump sum.