Mixed use is the default for most company passenger cars. We show what it really costs in tax compared with full deduction, and when switching to exclusive business use genuinely pays.
Mixed use is the default scenario for most company passenger cars in Poland. It is chosen not because it is the most favourable in tax terms — it is not — but because the alternative demands a discipline many businesses would rather not accept.
What mixed use means
It is the assumption that the car serves both the business and private purposes. The legislator then requires no proof and no log, but in exchange limits the deductions:
- VAT: 50%. You reclaim half the tax on every lease instalment and on running costs — fuel, servicing, tyres, car washes.
- Deductible costs: 75%. Three quarters of running expenses count as costs.
Beware a common misunderstanding: the 75% restriction applies to the expenses of using the car, not to the lease instalment itself. The instalment is subject to a separate mechanism — the proportion arising from the vehicle value cap.
What it really costs
Take a concrete example. A VAT-registered business, a combustion car worth 160 000 zł net, a lease instalment of 3 800 zł net, and running costs of 1 500 zł net a month.
Under mixed use you reclaim 50% of the VAT on the instalment, about 437 zł instead of 874 zł. The unclaimed half, another 437 zł, increases the cost base — but at the same time raises the value of the vehicle from which you calculate the cap proportion.
Of the 1 500 zł of running costs, 1 125 zł becomes a deductible cost, and you reclaim half the VAT on them. Over a year the difference against full deduction runs to several thousand złoty on a typical company car.
Unclaimed VAT is added to the value of the car from which you calculate the proportion from the cap. Mixed use therefore raises the vehicle's value for tax purposes and by the same token lowers the ratio you apply to the capital instalments.
Full deduction: what it requires
To reclaim 100% of VAT and the whole of your running costs, the car must be used exclusively in the business. That requires three things together:
- filing the VAT-26 notification with the tax office,
- keeping a detailed vehicle mileage log for VAT purposes,
- setting rules of use that exclude private journeys, for example a fleet policy.
The log is not a token obligation. Every journey needs an entry with the date, purpose, route and distance. A single private trip — even the commute from home to the office, if the car is parked at home — can undermine the whole deduction in an inspection.
When switching pays
The arithmetic is straightforward. The higher the monthly spend on the car, the greater the absolute benefit of full deduction. At an instalment of 3 800 zł and running costs of 1 500 zł, the difference exceeds a thousand złoty a month, which justifies the cost of keeping the log.
On a cheaper car with low mileage, the benefit can be smaller than the time spent on the log and the risk of a dispute with the authorities. Mixed use is then a rational decision rather than a lapse.
Vehicles outside this mechanism
It is worth remembering that this whole restriction applies to passenger cars. Vehicles meeting the statutory conditions for goods vehicles, confirmed by an additional technical inspection and an annotation in the registration document, allow full VAT deduction without a log and are not subject to the value cap in income tax.
Frequently asked questions
Do I have to keep a mileage log under mixed use?
No. That is the main advantage of this arrangement — in exchange for limiting deductions to 50% of VAT and 75% of running costs, you keep no mileage log and file no VAT-26. The log is required only for full deduction.
Does the 75% restriction apply to the lease instalment too?
No. The 75% limit covers expenses of using the car — fuel, servicing, tyres, car washes. The lease instalment is accounted for separately, under the proportion arising from the vehicle value cap of 100 000, 150 000 or 225 000 zł depending on CO2 emissions.
Is the commute from home to the office private use?
Where full VAT deduction applies, the authorities consistently treat parking the car at home and commuting to the office as an element of private use, unless the business has a coherent fleet policy and genuinely enforces it. It is the most common reason full deduction is challenged in an inspection.
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