Private Car in a Business in Poland — 20% of Costs (2026)

Not every entrepreneur enters a car in the company's assets. If you use a private car — registered in your name but not entered in the fixed-asset register — you can include 20% of operating expenses in costs.

This is the lowest of the three modes for accounting for a car in a sole proprietorship (JDG) (20% — private, 75% — company mixed use, 100% — exclusively business).

Art. 23 sec. 1 item 46 PIT — the 20% limit

Art. 23 sec. 1 item 46 of the income tax (PIT) Act (Dz.U. 2026 poz. 592) provides that 80% of expenses for the use of a passenger car not entered in the company's assets are not considered deductible expenses (KUP).

In other words: only 20% of expenses go into costs.

The limit covers:

• fuel,
• servicing and parts,
• car wash,
• parking and motorway tolls,
• insurance premiums (third-party liability (OC), comprehensive (AC), personal accident (NNW)).

The former per-kilometre PIT method no longer applies

Accounting for a private car based on per-kilometre rates (PLN 0.89 or PLN 1.15 per km) is no longer used for the owner of a sole proprietorship. These rates are relevant only when accounting for an employee's private car for business purposes (under separate provisions).

For the owner of a sole proprietorship, 20% of operating expenses applies, not a per-kilometre rate.

VAT with a private car

For a car used for mixed purposes (business and private), an active VAT taxpayer deducts 50% VAT on operating expenses (Art. 86a VAT Act, Dz.U. 2025 poz. 775).

A full VAT deduction (100%) requires the exclusion of private use — which, in the case of a private car owned by a sole proprietorship, is very difficult to prove.

More on car VAT: A car in a sole proprietorship — PIT and VAT costs.

Comprehensive insurance (AC) — a separate limit of PLN 150,000

The 20% limit is not the only restriction for a private car. For comprehensive insurance (AC), the car-value limit under Art. 23 sec. 1 item 47 PIT additionally applies.

Unlike the depreciation limits (which depend on CO₂ emissions), the AC limit is fixed and amounts to PLN 150,000 for all passenger cars, regardless of powertrain and emissions.

If the car's value exceeds PLN 150,000, the portion of the AC premium proportional to the excess is not a deductible expense even within the 20% boundary.

Settlement example

An entrepreneur uses a private car (not entered in the fixed-asset register). Fuel invoice: PLN 100 net + PLN 23 VAT = PLN 123 gross.

PIT costs (active VAT taxpayer):

• VAT deduction: PLN 11.50 (50% of PLN 23),
• non-deducted VAT: PLN 11.50,
• PIT cost basis: PLN 100 + PLN 11.50 = PLN 111.50,
• Deductible expense (20%): PLN 22.30.

PIT costs (VAT-exempt taxpayer):

• PIT cost basis: PLN 123 gross,
• Deductible expense (20%): PLN 24.60.

Most common mistakes

1. Using the old per-kilometre rates

For the owner of a sole proprietorship, the 20%-of-expenses limit applies, not per-kilometre. Per-km rates concern only an employee's car.

2. Applying 75% instead of 20%

The 75% limit concerns a car entered in the company's assets (fixed asset or lease). A private car = 20%.

3. Deducting 100% VAT with a private car

Without excluding private use, 50% VAT applies, not 100%.

4. Ignoring the AC limit

The AC premium is additionally limited by the vehicle-value limit. Applying 20% to the entire premium is not enough if the car is expensive.

FAQ

What percentage of costs applies with a private car?

20% of operating and insurance expenses (Art. 23 sec. 1 item 46 PIT).

Does the per-kilometre method still work?

Not for the owner of a sole proprietorship. The 20% limit applies. Per-km rates concern an employee's car.

Can 100% VAT be deducted with a private car?

No, without excluding private use, 50% VAT applies (Art. 86a VAT).

Is AC also subject to 20%?

Yes, but it is additionally limited by the fixed vehicle-value limit of PLN 150,000 (Art. 23 sec. 1 item 47 PIT), regardless of CO₂ emissions.

Sources

• PIT Act — Art. 23 sec. 1 items 46 and 47 (Dz.U. 2026 poz. 592)
• VAT Act — Art. 86a (Dz.U. 2025 poz. 775)
• More on cars in a sole proprietorship: A car in a sole proprietorship — PIT and VAT costs
• More on fuel VAT: VAT on fuel in a sole proprietorship

Need help with a car in your sole proprietorship?

Oxyok accounts for fuel, servicing, leasing, and insurance. Accounting starts at PLN 49 + VAT per month.

Write to Paweł or see Oxyok accounting.

Note: Private car = 20% of costs. Company car (fixed asset) = 75% for mixed use. Exclusively business car = 100%. The choice depends on ownership and manner of use.