It is common practice among car leasing companies to collect an upfront fee before delivering the vehicle. This is known as an invoice for ordered item. Can the lessee deduct this expense as a tax-deductible cost (KUP)?
While this arrangement is undoubtedly beneficial for both leasing companies and lessees, its tax treatment is not entirely clear. The provisions of both Article 22 and Article 23b of the PIT Act do not provide a definitive answer in this regard.
The only guidance on the matter comes from tax rulings, of which there are few in PIT.
„(…) The upfront leasing fee mentioned in the application is a standalone, non-refundable payment not assigned to individual lease installments, and its payment is a necessary condition for the execution of the leasing agreement. This fee is a one-time expense related to the conclusion of the leasing agreement, and consequently, to the delivery of the leased item. In such a case, under the cited regulations, the upfront leasing fee should be included in tax-deductible costs all at once, without the need to spread it over time.
“The expense related to the payment of the upfront leasing fee, as mentioned in the application, should therefore be recorded in tax-deductible costs all at once on the date of its occurrence.”
Tax Ruling of July 31, 2020, Ref. No. 0114-KDIP3-2.4011.408.2020.2.MT
In simple terms, if there is an invoice for ordered item, it can generally be included in tax-deductible costs. The upfront fee can be considered a tax-deductible expense, provided it meets the criteria for being recognized as such.
If you have questions about tax settlements, are interested in the topic of an invoice for an ordered item, or would like to calculate the benefits of leasing a car, visit us at www.outsourced.pl .
