Can electric scooter be a cost?
Recently, an electric scooter has become an excellent alternative to cars, bicycles and scooters. Undoubtedly, this mode of transport allows you to move more efficiently in crowded cities. Is it possible, then, for the purchase by an entrepreneur to be included in the company's costs?
What is considered a tax deductible cost?
Pursuant to Art. 22 (1) of the Personal Income Tax Act, an expense incurred in order to achieve, maintain or secure a source of income may be considered a tax deductible cost, with the exception of the expenditure referred to in Art. 23 of the aforementioned Act.
At the same time, it should be remembered that it is the entrepreneur who, in the event of a possible inspection of the tax office, must prove the relationship of the cost incurred with the economic activity. It is not always possible to unequivocally state that a given expense may be a tax expense. In such situations, it is worth submitting an application for an individual tax interpretation.
The electric scooter is a personal transport device that allows you to reach speeds of up to 25 km / h. Therefore, many entrepreneurs are considering buying it. So, can the purchase of an electric scooter for a company become a tax-deductible cost?
The electric scooter was not listed in the closed catalog of expenses that cannot be classified as tax deductible costs and can be an excellent "means of transport" used, among others in order to travel to your own company, client or contractor. In addition, it is easier to use it to avoid traffic jams at rush hour. So if there is legitimacy to use an electric scooter only in business and its purchase has been properly documented (by invoice or bill), it may, in principle, constitute a business cost for the taxpayer.
Confirmation of recognizing the scooter as a tax deductible cost is the individual interpretation issued by the Director of the National Tax Information on August 7, 2019, file ref. 0112-KDIL3-3.4011.242.2019.2.TW, in which we read that:
"(...) the expenditure on the purchase of a scooter, which will be used by the Applicant only for the purposes of its business activity, may be directly included in tax deductible costs. Therefore, it is possible to include this expense as tax deductible costs in the month in which the electric scooter was purchased ”.
Despite the positive interpretation, it is worth making sure that during the tax inspection, the purchased scooter for business purposes is not considered to be an object serving to meet the personal needs of the owner or his family members, so that its purchase could be questioned by the tax office.
Due to the fact that the scooter, according to the Highway Code, is not a passenger vehicle, the costs associated with its operation do not have to be limited, as in the case of passenger cars. The related expenses are therefore recognized in their full amount.
Buying an electric scooter does not exclude a passenger car and vice versa. It is only important to justify having both modes of transport in a logical way (how and for what purpose both means of transport are used in the activity.), So that the expenditure is not questioned during a tax audit.
Electric scooter - how to qualify the expense?
As a rule, depending on the method of financing, value and period of use, an electric scooter can be:
- entered into the register of fixed assets,
- entered directly into tax costs,
- used on the basis of an operating or financial lease.
When the scooter meets the definition of a fixed asset and its value exceeds PLN 10,000 (net for VAT, gross for non-VAT), and the period of use will last over a year, the entrepreneur should enter the scooter into the fixed assets register. Then, the depreciation write-offs will be made at the tax cost.
However, if the value of the purchased electric scooter does not exceed PLN 10,000 (net for active VAT payers, gross for non-VAT payers), the taxpayer is not required to enter the scooter into the fixed assets register. Therefore, if the taxpayer considers its purchase as a tax deductible cost, it is posted to the 13th column of the KPiR - Other expenses.
When an entrepreneur uses an electric scooter in business under an operating lease agreement, he can enter the entire value of the resulting leasing installments, plus any handling costs and commissions based on the invoice received from the lessor, into the company's costs. Under operating lease, the equipment to which the contract relates remains in the property of the lessor until it is purchased by the lessee.
However, in the event that the electric scooter will be used in business under a financial lease agreement, the scooter is entered into the fixed assets register at the time of concluding the contract. In this case, the company expense will be monthly depreciation and interest on the basic part of the installment from the invoice received to the lessor.
In a situation where the purchase of an electric scooter serves only a taxable activity, the taxpayer is entitled to a full VAT deduction on its purchase and operating expenses.
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