Tax Authorities Check Mileage Logs Using ANPRS Camera Photos

The ANPRS system - the tax authorities' new tool for checking business owners

The National Revenue Administration (KAS) has taken up a tool that until now was associated mainly with combating smuggling and large-scale VAT fraud. The ANPRS system (Automatic Number Plate Recognition System), operating in Poland since 2017, records the registration plates of vehicles passing cameras placed on roads across the country. These data are now being used for an entirely new purpose - verifying company vehicle mileage records, commonly known as mileage logs.

The mechanism is simple but extremely effective. The tax authorities compare camera photos showing a specific car at a particular place and time with the entries in the vehicle mileage record kept by the business owner. If, according to the mileage log, the car was parked at the company car park, but the ANPRS system recorded it on a motorway in another voivodeship, the business owner has a serious problem.

The first drivers are already receiving official summonses to provide explanations. Printouts of the camera photos are attached to the official letters, which makes the evidence difficult to challenge. This is a fundamental change in the tax authorities' approach to checking company cars, and it should prompt every business owner to review their accounts carefully.

Who is affected by the checks and why are the stakes so high?

The checks target primarily business owners who deduct 100% of VAT on company cars. Full deduction is possible only where the vehicle is used exclusively for business purposes - with no private use whatsoever. To benefit from this right, the business owner must meet several strict conditions:

• file form VAT-26 informing the Polish Tax Office (urząd skarbowy) that the vehicle is used exclusively for business activity,
• keep a detailed vehicle mileage record describing each route, the purpose of the journey and the number of kilometres driven,
• implement internal rules and policies on vehicle use that exclude the possibility of using the car for private purposes,
• ensure that the vehicle is not parked at the home of the owner or employee (which the tax authorities interpret as a potential opportunity for private use).

The last point deserves attention. In an individual tax ruling from July 2024, the tax authorities denied a business owner the right to full VAT deduction solely because the company car was parked at their place of residence. In the authority's view, merely creating the possibility of private use is enough to challenge the right to full deduction - even without proof that such use actually took place.

This ruling shows how restrictive the tax authorities are on company cars and how easily the right to deduct 100% of VAT can be lost.

Financial consequences - how much can you really lose?

The consequences of the tax office challenging your accounts can be very severe. If the tax authorities prove that the company car was used contrary to the VAT-26 declaration, the business owner is required to correct the VAT deduction from 100% to 50%. Importantly, the correction may cover a period of up to five years back, which for more expensive vehicles generates very large amounts to be repaid.

The additional tax payment is not the end of it. Late payment interest, currently running at over ten per cent per year, is added to the unpaid VAT. In addition, the tax office may impose a 30% VAT penalty on the amount of the irregularity found. Experts estimate that for a car worth PLN 150,000, the total bill - covering the additional VAT, interest and penalty - may exceed PLN 20,000.

Fiscal criminal liability - the most serious risk

Where the tax office finds deliberate falsification of the vehicle mileage record, the matter can take an even more serious turn. The business owner may be held liable under the Fiscal Penal Code. Fines are then possible and, in extreme cases, even imprisonment.

An example reported by the media is telling - a client of one reputable law firm had to pay an additional PLN 10,000 in tax after correcting their return, but the fiscal criminal proceedings are still ongoing. This means that even after settling the tax arrears, the business owner cannot be sure the matter is closed.

How to protect yourself against a tax audit?

In view of the tax authorities' new practice, business owners should take protective action urgently. Above all, it is crucial to keep reliable records and to assess realistically whether the vehicle actually meets the conditions for full VAT deduction.

Practical protective steps

To minimise the risk, we recommend taking the following steps:

• Audit of the vehicle mileage record - check whether the entries in the mileage log match the actual routes and whether they contain inconsistencies that the ANPRS system could pick up.
• Review of the vehicle use policy - make sure that the company rules genuinely exclude private use and are followed in practice, not just on paper.
• Analysis of the parking location - if the company car is parked at home, consider changing this arrangement or voluntarily switching to a 50% VAT deduction.
• Consultation with a tax adviser or lawyer - a professional assessment of your situation will help identify potential risks before the tax office does.
• Voluntary correction of returns - if you know that your returns contain errors, correcting them yourself before proceedings begin helps you avoid fiscal criminal sanctions.

It is worth remembering that the Ministry of Finance does not disclose the scale of the checks or the number of irregularities found. This means it is not known how many cases are currently under way or which business owners will be summoned next. The ministry's lack of transparency should be an additional motivation to put your accounts in order.

Do not wait for a summons from the tax office - act now

The use of the ANPRS system to check mileage logs is a turning point in Polish tax law. The tax authorities have gained a tool that allows them to verify the truthfulness of business owners' declarations automatically and on a mass scale. The traditional approach - based on the assumption that "the tax office is unlikely to check" - no longer works.

If you run a business and deduct 100% of VAT on a company car, it is time for a professional review of your accounts. It is better to find and correct any errors in the vehicle mileage record yourself than to wait for an envelope from the tax office containing photos of your car.

Contact our firm to arrange a consultation. Our tax law specialists will analyse your situation, assess the risk of an audit and help you implement solutions that protect your business from costly consequences. The sooner you act, the better your chances of avoiding financial sanctions and fiscal criminal liability.