2025-06-17
Major changes to company car tax deductions starting in Poland from 2026
Major changes to company car tax deductions starting in Poland from 2026 Beginning January 2026, Polish rules for deducting the cost of passenger vehicles used for business purposes (tax depreciation) will undergo significant changes. The new regulations, adopted in 2021 yet effective 2026, will introduce stricter limits, shifting the focus from the vehicle’s value to its CO₂ emissions. This marks a major policy shift that will particularly impact businesses purchasing combustion engine vehicles.
Major changes to company car tax deductions starting in Poland from 2026
Beginning January 2026, Polish rules for deducting the cost of passenger vehicles used for business purposes (tax depreciation) will undergo significant changes. The new regulations, adopted in 2021 yet effective 2026, will introduce stricter limits, shifting the focus from the vehicle’s value to its CO₂ emissions. This marks a major policy shift that will particularly impact businesses purchasing combustion engine vehicles.
What’s changing?
Under the new framework, the maximum deductible amount for passenger cars acquired from 2026 onwards will depend on the car’s emissions:
• PLN 225,000 – for fully electric or hydrogen-powered vehicles
• PLN 150,000 – for vehicles emitting less than 50 g CO₂/km (primarily select plug-in hybrids)
• PLN 100,000 – for all other vehicles, including the majority of combustion engine and traditional hybrid models
Currently, only two limits apply: PLN 225,000 for electric vehicles and PLN 150,000 for all others. As of 2026, many businesses will no longer be able to fully deduct the cost of their vehicles.
Notably, the PLN 150,000 limit has remained unchanged since 2019, even as car prices have risen significantly in recent years. Instead of adjusting this threshold to reflect market realities, the government is now reducing it further.
What about leasing?
Leasing adds another layer of complexity. As of now, there are no clear transitional provisions ensuring that operational lease or rental agreements signed in 2025 will remain subject to the current (i.e. relatively better) tax treatment in subsequent years.
If you’re considering leasing, a safer approach may be purchasing the vehicle outright or opting for a finance lease, provided the vehicle is entered into your fixed asset register before the end of 2025.
What should you do now?
• If you’re planning to acquire a company vehicle, do so before the end of 2025.
• Always check the vehicle’s CO₂ emissions—this figure might determine your tax deduction limit.
• If you’re exploring leasing options, consult with a tax advisor to fully understand the implications and avoid surprises in 2026.
The new rules clearly reflect a policy shift toward incentivizing low-emission vehicles. However, for many businesses, this will result in higher tax liabilities and more complex compliance requirements—unless decisions are made strategically and in advance.
See other articles
Determining when a VAT liability arises in relation to services remains one of the more challenging issues in practice under Polish VAT law. Although Article 19a(1) of the Polish VAT Act clearly states that VAT becomes due when a service is performed, establishing when a service is actually “performed” sometimes requires a case-by-case assessment of the contractual model and the underlying commercial reality. Recent Polish judgment by the Supreme Administrative Court of 31 March 2026 (I FSK 1353/23) provides important clarification in the context of IT services.
As the Polish National e-Invoicing System (KSeF) becomes more widely used, businesses are increasingly encountering a practical issue known as the “double document circulation.” This occurs when the structured invoice stored in KSeF (XML) differs from the PDF visualization sent to the customer, for example by email or through a customer portal.
On 11 February, the EU General Court (Case T-689/24) delivered an important judgment in a “Polish case” on the moment of input VAT deduction. The ruling may have far-reaching consequences for Polish businesses and the way VAT is settled in Poland.
Invoice Issued Outside KSeF and Tax-Deductible Costs. Key Position of the Polish tax administration.
Individual tax ruling of 9 January 2026, ref. 0111-KDIB1-3.4010.714.2025.2.JG In an individual tax ruling dated 9 January 2026, the Director of the Polish National Revenue Information (KIS) addressed an issue that has raised significant practical concerns in the context of the implementation of the National e-Invoicing System (KSeF). The key question was whether an expense documented by an invoice issued outside the KSeF-system may be treated as a tax-deductible cost for the purposes of Polish corporate income tax (CIT).
The introduction of the mandatory Polish e-invoicing system (Krajowy System e-Faktur – KSeF) as of 1 February 2026 will significantly change VAT invoicing rules, i.a. transactions involving foreign entities. One of the key factors determining whether mandatory KSeF applies is whether a foreign counterparty has a fixed establishment (FE) in Poland. If it is lacking on the seller’s side, then he may issue and send invoices outside KSeF (e.g. via e-mail, PDF). If the seller is subject to KSeF yet his buyer is not (lacking seat/FE in Poland), then the seller must issue the invoice via KSeF, yet simultaneously send it to his buyer in the old-fashioned way.
The general tax ruling issued by the Polish Minister of Finance and Economy on 27th of November 2025 addresses the issue of land, buildings and structures being deemed as “related to business activity”. It is one of the most significant documents in recent years in the area of property taxation. Its importance goes well beyond a purely technical explanation of statutory provisions. At its core, it touches on a fundamental and long-running dispute between taxpayers and tax authorities: where the line should be drawn between mere ownership of real estate and its use for business purposes.
Even though penalties for issuing invoices outside Poland’s National e-Invoicing System (KSeF) have been deferred until 1 January 2027, the real headache may come sooner.
The Court held that, in certain circumstances, contractual penalties for delays may qualify as tax-deductible in Polish CIT. The case concerned a property developer unable to hand over apartments to clients in time, due to delays caused by the general contractor. The clients charged contractual penalties, which the developer has paid and qualified as tax-deductible costs. The Polish tax authority (KIS) argued that any penalty for non-performance or improper performance is excluded from tax costs under Art. 16(1)(22) of the Polish CIT Act. The Polish Supreme Administrative Court (NSA) disagreed.
CJEU: Is a TP profit true-up a service? Key takeaways from 4 Sep 2025 (C-726/23, Arcomet) The Court held that intra-group payments determined under TNMM (e.g., skimming part of a subsidiary’s operating margin above a threshold) can be deemed as consideration for services and thus fall within VAT—if there is a legal relationship and a direct link between the supply and the consideration.
Is a plot of land with a building scheduled for demolition considered ‘undeveloped land’? Under the Polish VAT Act, the sale of undeveloped land is exempt from VAT as long as it does not have the status of ‘building land’. Otherwise, such sale might be subject to 23% VAT. In contrast, the VAT on a sale of a developed plot of land is determined based on the history of the buildings/structures. In general: older buildings = VAT-exemption. A recurring question, however, is how to classify land where there are buildings or structures in poor condition that are intended to be demolished. Can such a property still be treated as “developed” for VAT purposes? The question might seem irrelevant, yet there is another layer to it. According to Polish tax law, if the sale of immovable property (plot, building) is not subject to VAT at all or is VAT-exempt, the buyer must pay a 2% tax on civil law transactions (Podatek od czynnosci cywilnoprawnych, also known as PCC). Thus, many B2B-sales aim at having the transaction taxed with VAT (deductible) to avoid PCC (non-deductible).