Vehicle mileage records for the purposes of VAT is a compulsory register for documenting routes, which allows 100% VAT to be deducted from the cost of operating a vehicle. It contains the date and purpose of the trip, the number of kilometers traveled and data confirming its accuracy, the name of the driver (if he is an employee of the company), the odometer balance as of the date of the start of record keeping, and the end.
What is a vehicle mileage log?
- A mileage log is a document that should contain data on the use of a vehicle in business.
- Data on the mileage of the vehicle, its use and the costs associated with its operation are required.
- Records should be kept continuously and accurately, the meter status must be carried from month to month.
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Click the image below to see how the example works records.
Who should keep mileage records?
- Mileage records should be kept by entrepreneurs who want to use passenger cars at up to 3.5 tons when deducting 100% of VAT.
- The obligation to keep records arises when a business wants to consider expenses related to the use of a vehicle as a deductible expense and thus deduct 100% of VAT from them, which is a condition for full VAT deduction.
How to keep mileage records?
Example printout to PDF generated mileage :
- The mileage records should include the following data: the registration number of the motor vehicle, the name of the person driving the vehicle, the purpose of the trip, the number of kilometers traveled, the costs associated with the operation of the vehicle.
- The records should be kept continuously and accurately to exclude the use of the vehicle for non-business purposes. At the end of each accounting period, the authenticity of entries in the records should be confirmed. This is important for compliance with the VAT Law.
- Note it is worth making sure that the correct entry from the registration inspection appears in the records, the offices often check this.
Practical examples of filling out records
The mileage log is a key document for deducting 100% of VAT on vehicle expenses. Below are practical examples of how to properly fill out the records:
- Example 1: Passenger car in the company:
- Vehicle registration number: ABC1234
- Start date and time: 01.10.2023, 08:00 a.m.
- Date and time of the end of the trip: 01.10.2023, 12:00 p.m.
- Destination: Meeting with a client in Krakow
- Number of kilometers driven: 150 km
- Travel-related costs: PLN 200 (fuel, parking fees)
- Example 2: Truck in the company:
- Vehicle registration number: XYZ5678
- Start date and time: 02.10.2023, 06:00 a.m.
- Date and time of the end of the trip: 02.10.2023, 18:00
- Destination: Delivery of goods to Wroclaw
- Number of kilometers driven: 300 km
- Travel-related costs: PLN 500 (fuel, tolls)
Keeping mileage records in this way allows you to accurately document your routes and expenses. This is essential for full VAT deduction.
Legal updates on vehicle mileage records
Legal updates on mileage records are crucial for entrepreneurs who want to deduct 100% of VAT on vehicle expenses. Here are the most important changes you should know:
- As of January 1, 2019: Mileage records have become mandatory for entrepreneurs using passenger vehicles in the company. This means that every entrepreneur must keep accurate records of routes in order to qualify for a full VAT deduction.
- As of January 1, 2020: The obligation to keep mileage records was extended to entrepreneurs who use heavy-duty vehicles. The introduction of this change was aimed at increasing transparency and accuracy in tax settlements.
Keeping track of these updates is essential to avoid problems with the IRS and make the most of tax deductions.
Benefits of proper -VAT mileage records
Proper maintenance of mileage records brings many benefits to entrepreneurs. Here are the most important of them:
- 100% VAT deduction: With accurate records, it is possible to fully deduct VAT on expenses related to the operation of the vehicle, which significantly reduces the cost of doing business.
- Full deduction of deductible expenses: Record-keeping also allows you to recognize all expenses related to the vehicle as deductible expenses. This reduces the tax base.
- Avoiding fines: Lack of records or their improper maintenance can result in financial penalties from the tax authority. Proper documentation avoids such problems.
With these benefits, keeping mileage records becomes not only a responsibility, but also a strategic tool for managing costs in the company.
Consequences of failing to keep Vehicle Mileage Records for VAT purposes
There are financial penalties for errors in submissions to the tax authority.
Failure to provide information on the use of vehicles exclusively for company purposes will result in criminal liability.
Declaration of a vehicle on the VAT-26 form
- You must submit the VAT-26 return to the tax office with jurisdiction for VAT purposes.
- You can do it on paper or online. Entrepreneurs are exempt from the obligation to keep mileage records when vehicles are put to paid use under a rental, lease or rental agreement.
Keeping records of vehicle mileage in the kilometer.net system
- Entries for mileage of private cars should be entered by adding car "used for business purposes. See what a sample mileage of a private car used for business purposes looks like. Cars used on the basis of a lending contract may or may not entail an obligation to keep mileage records for VAT purposes.
- We make entries for cars for which full mileage records are kept for vat purposes separately. See what a sample mileage log for vat purposes looks like.
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