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Since the beginning of October 2020, every taxpayer has been subject to JPK_V7, the new form of the Standard Audit File. It differs from the ordinary JPK because it does not include VAT-12. How, then, should those providing taxi services under the 4% flat-rate scheme settle their taxes, and should they submit a JPK_V7 file?
Those who conduct business providing taxi services can settle VAT in two ways if they do not use the entity-based exemption.
Under general rules at a VAT rate of 8%
According to item 40 of Annex 3 to the VAT Act, taxi services are subject to output tax of 8%. They also appear under PKWiU 49.32 with that VAT rate. Article 86(1) of the VAT Act states that the taxpayer may reduce output tax by input tax “to the extent that goods and services are used to perform taxable activities [...]”.
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For deductible input tax, a taxpayer who buys passenger cars, petrol, diesel or gas (needed to provide taxi services) has a limited right to deduct VAT – up to 50% of the tax shown on the invoice. The non-deductible remainder is a tax cost to be recorded in column 13 of the tax revenue and expense ledger (KPiR).
It is possible to deduct 100% of VAT on expenses when a passenger car was purchased solely for business purposes connected with providing taxi services. To do so, it is necessary to file VAT-26 with the tax office and keep a vehicle mileage record and company vehicle-use rules.
Flat-rate VAT at a rate of 4%
If you are a VAT taxpayer providing taxi services using a passenger car, you can use the second settlement method: flat-rate VAT of 4%. A distinctive feature of this method is that input tax cannot be deducted on purchases related to the business. The cost is the gross invoice amount (recorded in column 13 of the KPiR).
As Article 114(1) of the VAT Act states: “A taxpayer providing passenger taxi services, except for the rental of passenger cars with a driver (PKWiU 49.32.11.0), may choose to tax these services at a flat rate of 4%, after notifying the head of the tax office in writing by the end of the month preceding the period in which the flat rate will be applied”.
If you wish to settle VAT this way, you must file a VAT-12 return by the 25th of the month for the previous month.
Note: after choosing one of the above two methods, you cannot change it for 12 months.
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