Purchase of a motorhome or caravan - who can deduct VAT and on what terms?

Buying a camper or caravan can be very expensive. No one is shocked by prices exceeding 100,000. zloty. No wonder that buyers click with interest on sales announcements with a note about the possibility of deducting 23% VAT from the purchase - it gives 23,000. PLN "savings" for every 100 thousand. PLN net price of a motorhome or caravan. Unfortunately, in practice, the matter is not so rosy - a very small part of buyers can deduct all VAT, a small part of buyers can deduct half of it, and the vast majority of customers cannot do it at all. We will also apply different regulations, at least in part, to the motorhome and to the purchase of a caravan.

What conditions must be met to be able to deduct VAT on the purchase of a motorhome or caravan?

To think about deducting VAT at all when buying a motorhome or caravan, four conditions must be met:

1. We must have a company - a private person cannot deduct VAT. The buyer must therefore be an enterprise.
2. Our company must be one in which a motorhome or caravan will be used for business purposes. Otherwise, their purchase will not be tax deductible and VAT cannot be deducted from such a transaction. So if we are, for example, computer software developers running a sole proprietorship, it will be difficult for us to convince the Tax Office that we will use the motorhome for professional purposes. It is different if our business is a car rental company, the offer of which we want to expand with trailers.
3. Our company must be an active VAT payer, i.e. be obliged to calculate, collect and pay VAT.
4. We must purchase a camper or caravan from a company that can issue a VAT invoice for our purchase.

In summary, this means in practice that the possibility of deducting VAT applies only to transactions between two companies that are VAT payers, and the buyer plans to actually use a motorhome or caravan as part of his business.

When do we deduct all VAT from the purchase of a motorhome or caravan?

The caravan is simple. It is not a motor vehicle, so if we use it for business purposes, we deduct all VAT on a similar basis as when buying a computer. The situation is much more complicated when purchasing a motorhome.

In order to deduct all 23% VAT from the motorhome purchase invoice, we must meet three conditions:

1. The vehicle must be used only for the purposes of our business activity. However, our solemn promise is not enough for the Tax Office. The motorhome should be properly secured against private use, e.g. through appropriate regulations and its actual use. What provisions should such regulations contain? It may assume, for example, that after the company's opening hours, employees receive the caravan's keys and lock it in a parking lot that is inaccessible to them.
2. The purchase of the vehicle must be reported to the Tax Office on the VAT-26 form.
3. You should keep a record of the mileage of the vehicle in accordance with the odometer reading, in which we will confirm that each kilometer driven by the motorhome was related to running a business.

Theoretically, the companies that buy campers for rent are in a slightly better situation. Art 86a sec. 5 of the Value Added Tax Act says that such enterprises are exempt from the need to keep cumbersome records. In practice, however, according to the individual tax interpretation issued by the Director of the Tax Chamber in Warsaw, if the vehicle is used other than for rental purposes, e.g. for a test drive or for the purpose of traveling to the customer, records must be kept.

When do we deduct 50% VAT from the purchase of a motorhome?

What to do, however, if we want to use the company motorhome also for private purposes, i.e. for example to go on vacation? Then we can only deduct 50% VAT from the purchase transaction. The use of a motorhome for private purposes will also be popular, especially among people running a sole proprietorship, business trips combined with private ones. Some will say, of course, that no one can prove to us that when going on a business trip to the client's other end of Poland, we stopped for a weekend at a beautiful seaside campsite. In practice, however, it is better to deduct only 50% of VAT and have peace of mind than to live under the stress of worrying about the consequences of such bending of regulations regarding the possibility of deducting 100% VAT.

In practice, most companies that purchase motorhomes decide to deduct 50% of VAT. However, if we insist on deducting all VAT , we may first apply to the Director of the Tax Chamber with a request for an individual tax interpretation on whether the actions we plan to take are compliant with the VAT regulations. Certainly, we should carefully analyze the matter with the accounting office that serves us.

Motorhomes and trailers, or my business idea

Many people who have acquired a taste for the pleasures of traveling in motorhomes or caravans would like to take up this commercially, e.g. by running a rental of this type of equipment. However, such an initiative needs to be carefully considered at the beginning. At first glance, you can see that it will be a business that requires large initial expenditure - for vehicles (even leased), their service, an appropriate yard, office and advertising. The clientele of such a company is also quite narrow - they must be relatively wealthy people (renting a motorhome costs several hundred zlotys a day) who know the charms of spending holidays in this type of vehicle, but do not have their own.

Another consideration is how we document our business revenues and taxation. If our clients are mainly companies paying VAT, we can also afford to be its active payer. VAT will not be charged to our customers, because they will deduct it as part of VAT settlements in their own business, while we will be able to use VAT deduction when buying motorhomes or caravans. However, if we focus on renting vehicles to private persons, then it is worth considering whether it would not be better if we were not VAT taxpayers. Our clients will then receive from us bills or receipts from the cash register, not increased by the value of VAT.

We should also remember that we are obliged to have a cash register if our revenues from the sale of services to individuals and farmers exceed PLN 20,000. PLN per year. At first glance, this is a lot, but in practice it is only about PLN 1,667 per month. In order for such an expensive, especially at the beginning, activity such as a company dealing with the rental of caravans and motorhomes to be profitable, you have to fight for much higher revenues than PLN 1,600 per month, so sooner or later we will probably have to buy a cash register.