03_2017 Challenges of the motor vehicles tax
Although the statutory regulation on the motor vehicles tax is short (the total of eight articles with over two hundred articles of the VAT Act), the proper settlement of the tax may turn out to be exceptionally problematic, especially for companies with extensive vehicle fleet. It is greatly due to the fact that the tax operates on a self-calculation basis – it is up to the tax remitter to establish which of their vehicles are subject to the taxation, include the vehicles in a relevant tax return and then to calculate and pay the tax.
Scope of the tax
The motor vehicles tax applies to:
- trucks with a gross vehicle weight between 3.5 tonnes and 12 tonnes and with a gross vehicle weight equal to or exceeding 12 tonnes,
- road tractors and ballast tractors designed to be used with a semitrailer or trailer, with a gross vehicle weight of the vehicle set between 3.5 tonnes and 12 tonnes and with a gross vehicle weight equal to or exceeding 12 tonnes,
- trailers and semitrailers which, together with a motor vehicle, have a gross vehicle weight between 7 tonnes and 12 tonnes and with a gross vehicle weight equal to or exceeding 12 tonnes, excluding trailers and semitrailers strictly related to agricultural activities conducted by the agricultural tax remitter,
- buses.
No matter who uses a vehicle subject to the tax (for example in the case of leasing or rental), it is the owner’s obligation to calculate and pay the tax.
Different rates and authorities
The Act on local taxes and charges regulates merely the scope of possible rates (their maximum and, for certain vehicles, also minimum amount), while they vary depending on the vehicle and some of its parameters, such as weight and the number of seats. The applicable tax rates are established independently in each commune. The commune council has the right to diversify the taxes, taking particular account of the factors such as impact of the vehicle on the environment, vehicle capacity or the year of manufacture.
Owners of vehicles subject to the tax are obliged to submit the tax return to the mayor of commune, town or city, according to the location of their registered office or place of residence. It should be noted that multi-site enterprises have to settle all of their business units or sites separately, with a competent authority for each of them.
Tax return and its deadlines
In principle, a motor vehicles tax return must be submitted by 15 February each tax year for each and every vehicle owned. However, it should be noted that in the event of purchase of a vehicle subject to the tax during the year or where a vehicle is modified so that it becomes subject to the tax, the tax return must be submitted within 14 days.
The tax return should most of all include particulars of the tax remitter and amount of the calculated tax. However, the calculation should be supported by a statement indicating the number of vehicles and the amount of tax for each of the provided categories. Furthermore, the tax return should be accompanied by detailed information on the vehicles covered therein. The tax is payable in two instalments, generally by 15 February and 15 September each year, with a stipulation that the tax remitter is obliged to calculate the amount of payment on their own and to make the payment without being requested to do so by the commune.
Challenges of the tiny tax
The huge number of factors influencing the amount of motor vehicles tax make the tax settlement quite an engaging process, which requires a lot of data collection and processing. Firstly, in order to correctly settle the tax we need data on the vehicles owned, including their gross weight, type of suspension or motor capacity – the definite scope of the required information depends on the parameters used by the competent communes to diversify the tax rates.
Therefore, it should be analyzed in which communes the respective enterprise-owned vehicles are registered. For each of the communes, it is necessary to obtain access to the relevant resolution establishing rates for a given tax year. It is important to note that the rates may be changed during the year, which may complicate the legal status even more.
It may be also necessary to adjust a tax return during the year, if a vehicle has been sold, its parameters have changed or the company has relocated its registered office. In principle, both changes to the law and to the vehicles owned are accounted for proportionally in relation to individual months.
Given the number of details which affect settlement of the motor vehicles tax, it is very easy to make a mistake while settling this seemingly straightforward tax. Therefore, before submitting a tax return, it is worth thoroughly analyzing all information and even considering the use of professional assistance, especially for those having extensive vehicle fleet registered across several communes.
Contact us:
Michał Zwyrtek, senior mananger, Tax, PwC
Michał Pępek– consultant, Tax, PwC
