Tax Alert, 30 October 2013

The Polish Ministry of Finance is currently working on the draft regulation on VAT exemptions and detailed conditions for application of these exemptions including the questions related to the taxation of supply of second-hand cars. 

These works result from amendments to the VAT Act which will become effective on 1 January 2014 with respect to taxation of sale of all second-hand goods – thus making the sale of second-hand cars subject to VAT. In order to avoid this, the Ministry of Finance, which intends to maintain the exemption with respect to cars qualifying as second-hand goods, is working on the above-mentioned draft regulation.

As a result of these modifications, starting from the beginning of 2014 the companies will be able to sell used passenger cars and other motor vehicles without VAT even if they had the right to deduct 50% or 60% VAT upon purchase and the period of 6 months of using the car by the taxpayer required until now has not lapsed.

To sum up, businesses will be entitled to use the VAT relief even if they sell used cars on the day following its purchase date. 

The draft regulation is at present under inter-ministerial consultation.

If you require further information regarding this matter, please feel free to contact Mazars Poland Tax Advisory Department.

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