Judgment of the Supreme Administrative Court on the cost of fuel in relation to company cars used for private purposes

On 10 July 2018, the Supreme Administrative Court issued a judgment confirming that a lump-sum revenue added to an employee on account of their use of a company car for private purposes also comprises of the cost of fuel.

The judgment concerns the interpretations introduced in 2015 to the PIT Act in respect of the provisions concerning the determination, on the part of the employee, of the revenue on account of a gratuitous performance arising from the use of a company car for private purposes. By virtue of Art. 12 sec. 2a of the PIT Act, the revenue obtained by an employee on this account is determined at a monthly level of PLN 250.00 - for cars with an engine capacity of up to 1,600cm3, and PLN 400.00 - for cars with an engine capacity greater than 1,600cm3.

This regulation has resulted in a number of disputes between taxpayers and the taxman in respect of the issue whether the specified lump-sum on account of using a company car for an employee’s private purposes also comprises of the costs of fuel for such car, which costs are covered by the employer. According to the taxman, the costs of fuel are not comprised in the lump-sum and should be additionally added to the revenues of the employee.

In the aforementioned judgment, the Supreme Administrative Court challenged the taxman’s approach and confirmed that the lump-sum in question also comprises of the costs of fuel. This decision confirms the existing jurisprudence, advantageous for taxpayers, followed by the provincial administrative courts. What is important here is that this judgment of the Supreme Administrative Court is the first judgment of a court of higher instance confirming an approach which is advantageous to taxpayers.

Judgment of the Administrative Court in Poznań in respect of the gratuitous use of a logo

On 8 June 2018 (file no. I SA / Po 378/18; judgment not yet final), the Provincial Administrative Court in Poznań shared the position of the Director of the State Tax Information Office, as expressed in a tax interpretation, that the gratuitous use of a logo of a capital group results in obtaining, by the given taxpayer, a revenue on account of a gratuitous performance.

In the analysed situation, a Polish company belonging to an international capital group involved in production activity, placed a logo belonging to this group in its offices, as well as on the documents used by this company. The company’s use of this logo was determined by the Group policy in which every entity belonging to the Group, which operates all over the world, uses the logo in connection with its own activity. This obligation was imposed by the dominating entity and the policy of the Group, where each of its entities had to meet high quality requirements in all areas of activity, and the group's logo was a practical confirmation that these standards were being met. The applicant did not conclude any agreement for the use of the logo with the dominating entity, and did not make any payments on this account.

In the judgment issued, the court took the view of the tax office that the applicant received a performance in the form of a right to use a trademark of high renown. The value of this performance was a benefit consisting in the omission to collect remuneration for the right to use this trademark. Therefore, the value constitutes a taxable income on the part of the company.