Accounting for expenses on car insurance in a company and used in business activities depends on the type of insurance and on the profit tax or personal income tax. More on this below.

A passenger car used in business activities is subject to civil liability insurance of vehicle owners (OC, insurance of third party liability of vehicle owners) and NNW insurance (accident insurance) and may be insured under CASCO insurance (AC, auto casco insurance against damage) and GAP (guaranteed asset protection).

The classification of expenses for car insurance in a company as taxable varies depending on the type of insurance.

The costs of civil liability insurance of motor vehicle owners (OC) are fully taken into account as taxable costs for the purposes of income tax (CIT, Ustawa o podatku dochodowym od osób prawnych), art. 16 ust. 1 pkt 49), hereinafter referred to as the CIT Act.

The costs of CASCO insurance for a passenger car in a company are taken into account as taxable costs in the amount of up to PLN 150,000 of its value or proportionally to this amount in the case of a higher value in accordance with the CIT Act (art. 16 ust. 1 pkt 4). From 1 January 2026, new conditions) for taking into account costs for voluntary insurance (AC) of a passenger car will come into force.

We consider the 75% limit on expenses related to using a car for mixed (corporate and personal) purposes in our article.

The classification of expenses for insuring an entrepreneur's passenger car as taxable varies depending on the type of insurance and the form of ownership of the car.

An entrepreneur may include car insurance costs in taxable expenses depending on the type of vehicle ownership, the deduction is 20%, 75% or 100% of the cost of the car (art. 23 ust.1 pkt 46 i 46a Ustawa o podatku dochodowym od osób fizycznych):

• 20% of costs – if personal transport is used for mixed purposes: corporate and private,
• 75% of costs – applies to vehicles used in entrepreneurial activities for mixed purposes (private and corporate), constituting fixed assets used on the basis of a lease, hire, leasing or other similar agreement,
• 100% of costs – applies to vehicles used in entrepreneurial activities only for corporate purposes, which are part of fixed assets, used on the basis of a lease, hire, hire or other similar agreement, subject to certain conditions established by the legislator, including mileage.