KIS Greenlights Full Electric Car Lease Deduction for Business Owner

A sole proprietor in Poland who currently uses a combustion-engine car for business has received the tax authorities' approval to lease an electric vehicle and deduct all related expenses. In a binding interpretation published on 23 July 2026 (ref. 0112-KDIL2-2.4011.524.2026.2.AA), the Director of the National Revenue Administration (KIS) confirmed that the taxpayer could allocate 100% of the leasing payments for an electric car – with a value not exceeding PLN 225,000 – to his taxable costs.

The businessman, who operates under a flat-rate (liniowy) tax regime, argued that his existing petrol car was consuming too much fuel in city traffic. He planned to install solar panels and a battery storage system at his business premises, alongside the charging infrastructure, making the electric car economically and environmentally sensible. The KIS ruling confirmed that the full leasing instalments are deductible because, as the authority explained, the PLN 225,000 limit applies only to the capital portion of the lease – and in this case the car's value stays below that threshold. The interest component of each lease payment is always fully deductible, regardless of the vehicle's value.

The ruling also reaffirms that a sole proprietor is not limited to a single company car. As long as the need for multiple vehicles is justified by the nature and scale of the business, the associated costs can be treated as tax-deductible expenses. This principle has been repeated in several earlier KIS interpretations, including those from May 2025 and October 2024.

The Fine Print: Justifying Multiple Cars and Avoiding Tax Pitfalls

The Logic Behind the Ruling

The interpretation explicitly separates the capital (principal) element of a lease payment from the interest charge. The law (PIT Act) says that the part of the lease fee corresponding to the car's value above PLN 225,000 cannot be a tax cost. Since the electric car in question does not exceed that limit, the whole capital portion qualifies. The interest expense, being unrelated to the car's value, is always fully deductible. This is a straightforward application of existing rules, but the ruling provides fresh certainty for business owners contemplating a shift to electric mobility.

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The “Justification” Hurdle for Multiple Cars

Possessing two or more cars in a sole proprietorship is permissible, but the taxpayer must be ready to prove that each vehicle materially serves the business. As tax advisor Marta Szafarowska from Gekko Taxens explains – and the KIS has repeatedly stressed – the expenses must be purposeful, capable of generating revenue, rational and adequate to the real needs of the operation. Typical justifications include: using an electric car in city traffic while a combustion vehicle covers long-distance client visits, or splitting uses between a delivery van and a passenger car. Without a credible business rationale, tax inspectors may challenge the deductions.

Documentation Demands for Each Vehicle

How a car is used also dictates the administrative burden. If one vehicle is used exclusively for business (allowing 100% VAT deduction and full expense inclusion), the law requires an internal company by-law (regulamin) that describes its exclusive business use, the filing of a VAT-26 notification, and a mileage log. For vehicles used in a mixed (business and private) capacity, formal internal regulations are not strictly required by the law, but the taxpayer must still be able to prove that the car genuinely serves the business. In practice, many advisors recommend maintaining similar documentation to avoid disputes.

How to Secure the Deduction for Your Second Vehicle

  • Check the PLN 225,000 cap. If the electric car's value does not exceed this threshold, lease payments are fully deductible from your taxable income – both the capital portion and the interest element. This ruling (0112-KDIL2-2.4011.524.2026.2.AA) provides a clear precedent.
  • Prepare a business case for a second vehicle. You will need to document why one car is insufficient (e.g., fuel savings in the city vs. long-distance travel). The KIS will look for a rational link between the extra vehicle and your ability to generate revenue.
  • Match documentation to usage. For a car you reserve exclusively for business, create an internal regulation, file VAT-26 and keep a mileage record. If both cars are used for business and private journeys, you must still be able to prove the business use, even if a formal regulation is not mandatory.
  • Separate private motoring clearly. The taxpayer in this case already owned a third, purely private car. That separation helps demonstrate that the leased electric car and the existing petrol car are genuinely needed for work, not for personal convenience.