Car in a JDG Business — Costs, VAT, and Pitfalls 2026

A car is one of the most common costs in a sole proprietorship (JDG) — and one of the hardest to settle. The tax office checks mileage, VAT, and the business-to-private usage ratio. A mistake is costly.

Two Methods for Settling a Car in a JDG

Method 1: Mileage Log (Kilometer Rate)

You settle actual kilometers. The rate per 1 km depends on engine capacity:

• Up to 900 cm³: 0.58 zł/km
• Above 900 cm³: 0.85 zł/km

Requirements:

• Keeping a mileage log (date, route, purpose, kilometers)
• The car must be owned by the entrepreneur (or leased)
• You deduct VAT on fuel: 100% VAT on petrol/diesel (since 2022)

Method 2: Lump Sum (20% or Full)

If you don't want to keep a mileage log, you can settle the car on a lump sum basis:

• Monthly usage: 20% of the car's value annually, up to the lump sum limit
• You don't deduct fuel, insurance, or service costs — everything is in the lump sum
• You deduct 50% VAT on the car purchase and fuel

VAT on a Car — 50% or 100%?

A passenger car is partly used for private purposes — that's why you deduct only 50% VAT on:

• Car purchase
• Fuel
• Service and parts
• Insurance
• Leasing

Exception: If the car is used 100% for business (with a log and declaration), you can deduct 100% VAT. But this requires keeping a mileage log and documenting the absence of private use.

Car Usage Costs — Table

| Element | Mileage Log | Lump Sum | |---------|:---:|:---:| | Fuel costs | ✓ (75% of cost) | in lump sum | | Insurance | ✓ | in lump sum | | Service/parts | ✓ | in lump sum | | Depreciation | ✓ | in lump sum | | VAT on fuel | 100% (petrol) | 50% | | Annual limit | none | lump sum limit |

Pitfalls and Mistakes

1. No mileage log — if you claim the car is 100% for business, you must prove it
2. Deducting 100% VAT without a log — the tax office can reverse the deduction and impose punitive VAT
3. Mixing methods — you can't settle by mileage one time and lump sum another
4. Family car — if your spouse uses the car privately, you must add that to employee costs (if you pay a salary)

Frequently Asked Questions

Do I have to keep a mileage log?

No, if you choose the lump sum. But if you want to deduct 100% VAT or settle full costs — yes.

Can I put a car in costs on lump sum tax (ryczałt)?

No. On lump sum tax (ryczałt), you don't deduct costs. You can only settle a car on the tax scale (progressive) or flat tax 19%.

Is car leasing worth it?

Yes, if the car costs more than 150,000 zł and you're an active VAT payer. Lease payments go into costs and you deduct 50% VAT.

Need Help with a Car in Your Business?

I settle cars in sole proprietorships (JDG) — mileage logs, lump sum, leasing, VAT. From 49 zł + VAT monthly.

Write to [email protected] or visit oxyok.com/pl.