From 1 January 2015 new tax regulations apply in Poland covering the use of company cars for private purposes. A lump-sum rule will apply, instead of market valuation.

The old rules

Employment income includes not only salary, but also fringe benefits the employee gets free or at a discount. These include private medical services, gym memberships and private use of company cars.  If an employee is allowed to use a company car for private purposes, even commuting to work, the employer should deduct income tax on the value of the benefit.

An unquestioned advantage of the changes is the elimination of the risk in relation to valuing this benefit which, until now, has been borne mainly by employers. The old regulations required the employer to apply market costs, despite the difficulty of comparing the value of using a company car outside working hours to that of short-term hire from a rental company. This exposed employers to the risk of withholding insufficient amounts of income tax and social insurance premiums and the tax office challenging their valuation of these benefits.

The new rules

  • The monthly monetary value of using a company car for private purposes is fixed at PLN250 for cars with an engine capacity of up to 1.6 litres and PLN400 for cars with larger engines.
  • The value of the benefit can be reduced by 1/30th of the relevant lump sum for every day that a company car is not used for private purposes.
  • If an employee makes some payment towards private use, this can be deducted from the relevant lump sum.
  • Importantly, the new regulations refer only to employees. They do not cover individuals such as directors who are not employed by the company but whose taxes it withholds as tax agent.


The reduction of the lump sum for partial use during a month could raise doubts of interpretation. Apparently, every month employees will have to declare how many days they use company cars for private purposes. This issue also applies where one company car is used by several employees. In such cases, it will be necessary to determine carefully who used the car for private purposes and when.

The new regulations do not address related costs, such as maintenance, repairs, inspections, cleaning, parking and the like. It is not clear whether payment of these costs by the employer is covered by the monthly lump sum. Employers should protect themselves by adopting a properly-drafted internal policy for private use of company cars.

The regulations don’t address fuel consumption, but the Ministry of Finance has stated that this is not included in the lump sum. Therefore employees should account carefully for fuel consumed during private use.