Tax deductible costs Poland: Changes in tax cost limits for passenger cars

On 1 January 2026, the current limits relating to expenses associated with the use of passenger cars in business activities, which are classified as tax-deductible costs, will be replaced. The new limits will depend on the level of carbon dioxide (CO2) emissions. The Ecovis experts explain the impact of the new regulations on operating costs.

The new emissions-based limits are the result of an amendment to the Corporate Income Tax Act, which aims to promote low-emission vehicles and support the ecological transformation of company fleets.

Background

Polish tax law commonly applies various limits on amounts relating to, among others, tax deductions, income deductions, one-off depreciation, the obligation to prepare transfer pricing documentation, or VAT settlement purposes. One such limit is the limit on expenses for passenger cars used in business activities, which are classified as tax-deductible costs.

Current limits

Currently, depreciation of passenger cars is not considered tax-deductible for the amount of the value of the car exceeding:

• PLN 225,000 (Polish Złoty, PLN 100 = approx. EUR 23) for electric or hydrogen-powered passenger vehicles
• PLN 150 000 for other passenger cars

Limits applicable from 1 January 2026

From the new year, the following limits, which are based on the level of CO2 emissions, will apply:

• PLN 225,000 for electric or hydrogen-powered passenger vehicles (this limit will remain unchanged)
• PLN 150,000 for passenger cars whose CO2 emissions from an internal combustion engine are less than 50 g per kilometre, based on data contained in the central vehicle register
• PLN 100,000 for passenger cars whose CO2 emissions from an internal combustion engine are equal to or higher than 50 g per kilometre, based on data contained in the central vehicle register

We'll discuss the impact of the new regulations on your operating costs with you. Contact us.

Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warszawa, Poland

This is what companies should know and consider now

The change will undoubtedly have a practical impact on the costs of running a business. One issue that remains to be resolved is how the change in limits will affect tax-deductible costs related to the use of cars under a lease or rental agreement.

The transitional provisions to the act indicate that the new regulations will apply to cars entered in the fixed asset register from 1 January 2026, replacing the old (more favourable to taxpayers) rules.

The introduction of fixed assets into the register generally means that the car has been purchased by the taxpayer. This can lead to the unfavourable treatment of expenses related to the use of cars under a lease or rental agreement.

The wording of the regulations indicates that the new limit will apply to the settlement of costs of cars used under a lease, rental or hire agreement, even if the agreement was signed before 1 January 2026. This means that the old limit will apply to expenses incurred before 2025, while the new limit will apply to expenses incurred after 2026, which in turn may lead to unequal treatment of taxpayers.

This unfavourable approach to the recognition of costs of cars used under a lease, rental or hire agreement was recently confirmed by the Ministry of Finance.

For further information please contact:

Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warszawa, Poland
Email: hubert.kaczynski@ecovis.pl