Vehicle mileage records for VAT purposes 26

What is a vehicle mileage log?

Vehicle mileage records for the purposes of VAT 26 is a document that should contain data on the use of the car for business purposes. Keeping records allows you to deduct VAT on the operation of the vehicle to the full extent 100% regardless of whether the car has a VAT-1 entry in the registration certificate

Who should keep mileage records?

Mileage records should be kept by entrepreneurs, deduct VAT in 100% on passenger cars, as part of their business activities. The obligation to keep records stems from tax regulations and is required for VAT purposes. Failure to keep adequate records may lead to the vehicle also being deemed to be used for non-business purposes, affecting the ability to fully deduct VAT and operating expenses.

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Keeping records of vehicle mileage

Mileage records should include the following:

• Motor vehicle registration number
• The date of the start of record keeping
• Motor vehicle odometer as of the date of the beginning of record keeping, at the end of each accounting period, and at the date of the end of record keeping
• Entry of the person driving a motor vehicle concerning any use of that vehicle
• The number of kilometers driven at the end of each accounting period and at the date of completion of record keeping
• Vehicles used under a rental, lease or leasing contract may be exempt from recordkeeping if these activities are part of the entrepreneur's business activities

Practical examples of record keeping

Keeping mileage records may be simpler than you think. Here are some practical examples:

• Entrepreneur XYZ runs a business and uses a personal car for business purposes. In order to deduct 100% VAT, he keeps mileage records in which he notes the date, time, starting and ending place of each trip, as well as the purpose of the trip and the number of kilometers driven. This allows him to accurately document the use of the vehicle exclusively for business purposes.
• ABC Entrepreneur uses a truck for business purposes. His mileage records include entries for the date, time, starting and ending place of each trip, the purpose of the trip and the number of kilometers driven. Keeping records in this way allows him to fully deduct VAT on the cost of operating the vehicle.
• If yours has a vat-1 entry in the registration certificate leading mileage is not necessary in order to write off 100% VAT.

Mileage records for VAT 26 purposes - not to be confused with the mileage of an entrepreneur

• The mileage records for the purposes of deducting 100% VAT and 100% vehicle-related expenses should include data on:
  • Date and time of departure
  • Place of departure
  • Destination
  • Number of mileage
  • Operating costs (may be attached as a separate accounting document)

Filling out the VAT-26

• You must submit the VAT-26 return to the tax office with jurisdiction for VAT purposes.
• You can do it on paper or online.
• Remember to submit the VAT-26 form on time.

The most common mistakes when filling out the VAT-26

Filling out the VAT-26 can be complicated, and mistakes can have serious consequences. Here are some of the most common mistakes:

• Incorrect completion of vehicle data: It is common for entrepreneurs to enter the wrong vehicle registration number or confuse the make and model. It is important to check this information carefully before submitting the form.
• Errors in mileage data.
  Incorrect entry of the date, time, place of start and end of the trip may lead to rejection of the records by the tax office. Each entry should be accurate and consistent with reality.
• Incorrect completion of cost data: Entrepreneurs often confuse the amounts of costs or how they are accounted for. It is important that all costs are accurately documented and consistent with invoices.

Deadline for submitting VAT-26

• The VAT-26 form must be submitted no later than 7 days counting from the date on which the first expense related to these vehicles is incurred.
• If this form is not submitted, the motor vehicle is considered to be used for mixed activities - private and taxed. Consequently, there is no right to deduct full VAT, but only 50%.

Mileage records for VAT 26 purposes - consequences of not keeping mileage records

There are financial penalties for filing errors. Failure to provide information on the use of vehicles exclusively for business purposes (and to deduct full VAT in the case of vehicles that are subject to such a declaration) or submitting it after the deadline or providing data inconsistent with the actual state of affairs and, together with this, making a tax deduction contrary to the provisions of the VAT Act, will result in criminal liability of not less than PLN 933. Errors in keeping mileage records may also affect vat deductions.

Comparison of manual and electronic records

Mileage records can be kept manually or electronically. Here are some advantages and disadvantages of each method:

• Manual records:
• Advantages: Simplicity and no need for specialized software. It can be kept in a regular notebook or on pieces of paper.
• Disadvantages: Risk of errors, difficulty in storing and retrieving data. Manual entries can be time-consuming and prone to mistakes.
  
• Electronic records:
• Advantages: Precision, ease of data storage and retrieval. Ability to automatically calculate costs and generate reports. Electronic systems can also remind you to make entries.
• Disadvantages: Need to have specialized software and risk of system failure. Also requires basic computer and software skills.

Record of vehicle mileage in kilometrowka.net system

• Add a car by indicating the type of settlement for VAT
• Create new mileage
• Add entries
• You can order the module GPS which will make it easier for you to keep records

Difference in calculating cost of private car used in business before 2019 and after

Mileage records for VAT 26 purposes - expenses for the use of a private passenger car used for the taxpayer's business until the end of 2018 were booked at the end of the month in the P&L on the basis of mileage limits.

From January 2019, on the other hand, the cost should be recognized immediately in the P&L on the basis of an invoice at the permanently set limit of 20%. Vehicles used under a lending contract are also subject to these rules. In this situation, operating expenses can be deducted according to the records kept for VAT purposes.

Impact of legal changes on mileage records

Legal changes can have a significant impact on mileage records. Here are some examples:

• Change in VAT deduction regulations: New regulations may introduce changes in the way VAT is documented and deducted from vehicle operating expenses. Entrepreneurs need to stay abreast of current regulations in order to properly maintain mileage records.
• Changing regulations on doing business: New regulations may require changes in the way mileage records are kept. For example, the introduction of new documentation requirements may require more detailed entries or additional information.

Keeping mileage records in accordance with current regulations is crucial for entrepreneurs. Especially for those who want to take advantage of the full VAT deduction and avoid problems with the tax office.

Summary

Mileage records are essential for entrepreneurs who want to use motor vehicles and be able to deduct 100% VAT. This applies to the costs associated with the use and purchase of these vehicles in business.

The VAT-26 declaration must be submitted to the tax office with jurisdiction for VAT purposes within 7 days of incurring the first expense related to the vehicle.