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The recent, broadly commented upon, European Court of Justice ruling on Polish VAT enables Polish taxpayers to recover VAT incurred (and not recovered) on purchase of fuel to certain cars.We are actively approaching our clients and targets in this respect as this may trigger significant overpayment claims and savings for the future.
Still we see other potential significant opportunities for automotive industry resulting that ruling. In practice, it implies that under certain circumstances (e.g. formal certification of a car as a truck) the full amount of VAT incurred on purchase of cars used for their business activity could be recoverable. The below numbers show the amount of potential savings and the reduction of cost for a purchaser:
| Currently: |
| Car price net: |
VAT to be recovered by purchaser: |
Total cost of car for purchaser: |
| EUR 25.000 + VAT EUR 5.500 |
max EUR 1.500 |
EUR 29.000 |
| Potential effect of ECJ ruling: |
| Car price net: |
VAT to be recovered by purchaser: |
Total cost of car for purchaser: |
| EUR 25.000 + VAT EUR 5.500 |
full amount EUR 5.500 |
EUR 25.000 |
| Savings for purchaser EUR 4.000 |
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At present, when the automotive sector is suffering from the global economic slowdown, offering car models that enable full VAT recovery could be a competitive advantage on the market and effectively support sales in Poland. However, such solution may require an organized cooperation of car producers and local importers consisting in introduction of technical changes to certain models and application for a certification of particular car models to the Polish Ministry of Infrastructure. The activities would result in an official reclassification of passenger cars (chassis type AF) to truck required for VAT purposes. Such practice was frequent before VAT law change as of 1 May 2004. |
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