Depreciation of fixed assets in Poland: how to lower your tax

Depreciation (amortyzacja) of fixed assets is a key element of tax planning in every business. It lets you spread the cost of buying assets systematically over their useful life, which directly reduces the tax base. Business owners who use the different depreciation methods consciously can plan their tax burden better and improve their company's cash flow.

Managing depreciation properly requires an understanding not only of the legal rules but also of how they work in practice. Depending on the type of business, the nature of the fixed assets and the business strategy, business owners can choose from several depreciation methods, each with different tax benefits.

Depreciation of fixed assets reflects the gradual wear of assets through depreciation write-offs, made by spreading the value of fixed assets systematically and according to plan over a set depreciation period. These write-offs are a tax-deductible cost that directly reduces the income tax payable

Definition and classification of fixed assets

Fixed assets are a fundamental category of property in every business and require a special approach in accounting and tax terms. Identifying and classifying them correctly is the basis for further steps related to depreciation and tax planning. We discuss the general rules that govern write-offs in our article on rules for depreciating business assets.

Fixed assets are tangible assets with an expected useful life of more than one year. They must be complete, fit for use and used for the needs of the business, or made available for use under a rental or lease agreement.

Fixed assets include structures, buildings and premises constituting separate property, as well as machinery, equipment, means of transport and other items with a useful life of more than one year. All of these assets must be used in the owner's business

The classification of fixed assets is crucial for determining the correct depreciation rate. Each group of fixed assets is subject to different rules and rates, which directly affects the amount of tax-deductible costs in particular years.

Buildings and structures are the most durable category of fixed assets
Machinery and equipment have a medium useful life
Means of transport are subject to special depreciation rules
Computer sets have a higher depreciation rate (30%), while software (licences) is depreciated as an intangible asset – over at least 24 months
Furniture and office equipment fall into the category with standard rates

Correct classification of fixed assets lets you make full use of the tax options available and avoid mistakes in your settlements with the tax office (urząd skarbowy). Business owners should analyse the nature of the assets they buy particularly carefully.

Straight-line depreciation method

The straight-line method is the basic and most commonly used form of depreciating fixed assets. It is simple to calculate and makes costs predictable over the whole depreciation period, which makes it attractive to most business owners.

Under the straight-line method, depreciation write-offs are calculated from the initial value of fixed assets using the annual rate set out in the schedule of depreciation rates. The annual write-off is a fixed amount throughout the depreciation period.

Under the straight-line method, the annual depreciation write-off stays the same throughout the useful life of the fixed asset. It is calculated by multiplying the initial value by the depreciation rate set out in the Schedule of annual depreciation rates (Annex 1 to the PIT Act) for the group of the KŚT (Classification of Fixed Assets)

The main advantages of the straight-line method are easy cost planning and a predictable effect on the company's financial result. Business owners can forecast their tax burden precisely and plan investments on the basis of fixed depreciation costs.

Applying the straight-line method requires the following steps:

Determining the initial value of the fixed asset
Identifying the correct group in the Classification of Fixed Assets
Applying the appropriate depreciation rate
Calculating the annual depreciation write-off
Booking the monthly write-offs systematically

KŚT group	Type of fixed asset	Annual rate	Depreciation period
Group 1	Non-residential buildings and premises	2.5%	40 years
Group 2	Civil and water engineering works (structures)	4.5%	approx. 22 years
Group 3	Boilers and power machinery	7%	approx. 14 years
Group 4	General-purpose machinery, equipment and apparatus	10%	10 years

Since 2023, residential buildings and premises have not been subject to tax depreciation (Article 22c point 2 of the PIT Act). The straight-line method is particularly beneficial for businesses with stable revenue, where spreading depreciation costs evenly allows better cash-flow management and tax planning.

Accelerated depreciation method

The accelerated depreciation method lets business owners write off the value of fixed assets faster, which means higher tax-deductible costs in the first years of use. It is a particularly beneficial solution for companies looking for immediate tax benefits.

In some situations, business owners can set an individual (higher) depreciation rate for used or improved fixed assets entered in the company's register for the first time (Article 22j of the PIT Act). Used fixed assets are those that, before their purchase, had been used by another entity for at least six months. Our complete guide to fixed asset depreciation gives a full overview of rates and conditions.

This definition of used fixed assets applies to fixed assets in KŚT groups 3-6 and 8 and to means of transport. The business owner must prove that the item bought had been used if they apply the increased depreciation

The depreciation rate for used assets is set individually by the business owner, but the law provides certain limits. The depreciation period of a used fixed asset entered in a given business owner's register for the first time cannot be shorter than a set minimum.

For fixed assets in groups 3-6 and 8 of the Classification, the following limits apply:

24 months (2 years) - where the initial value does not exceed PLN 25,000
36 months (3 years) - where the initial value is higher than PLN 25,000 and does not exceed PLN 50,000
60 months (5 years) - in other cases

For means of transport, including passenger cars, the minimum depreciation period is 30 months (2.5 years).

A practical example of the accelerated method: When a business owner buys a new car, the basic straight-line rate is 20% and the depreciation period is 5 years. If the car bought met the definition of a used car, the business owner could increase depreciation to 40%, and the depreciation period would be shortened to 2.5 years.

In special situations, increased depreciation rates can be applied using specific coefficients. The coefficients can be at most:

1.2 for buildings and structures used in worsened conditions
1.4 for buildings and structures used in bad conditions and for machinery, equipment and means of transport used more intensively
2.0 for machinery and equipment in groups 4-6 and 8 of the Classification of Fixed Assets that are subject to rapid technical progress

Use of a building in worsened conditions means use under the constant action of water, steam, significant vibrations, sudden temperature changes and other factors that accelerate the wear of the building

Bad conditions cover the use of buildings under the influence of destructive chemicals, especially where they serve for the production, manufacture or storage of corrosive chemicals. This also covers strong exposure of the building to destructive chemicals dispersed in the air or water or released as vapours.

Reducing-balance (degressive) depreciation method

The reducing-balance (degressive) method allows high depreciation write-offs in the first years of a fixed asset's use. It is a particularly beneficial solution for businesses investing in modern technologies.

The degressive method assumes that the usefulness of a fixed asset decreases over time, which justifies higher write-offs in the initial period. It allows high write-offs during the first few years of use, which translates into significant tax benefits.

Under the degressive method, the rate is taken from the Schedule of depreciation rates and then increased by a set coefficient. From the year in which depreciation calculated under the degressive method would be lower than depreciation calculated under the straight-line method, you switch to the straight-line method

The limits on using the degressive method are set out precisely in tax law. The degressive method applies only to machinery and equipment in KŚT groups 3–6 and 8 and to means of transport (Article 22k(1) of the PIT Act) – it cannot be used for buildings and structures (KŚT groups 1 and 2), passenger cars or items in groups 3–6 and 8 that are not machinery and equipment.

The degressive method applies to means of transport other than passenger cars, which makes it attractive to transport and logistics companies investing in a fleet of commercial vehicles.

The benefits of using the degressive method include:

Faster recovery of the money invested through higher tax-deductible costs
A better match with the actual economic wear of the fixed asset
The option to reinvest tax savings in developing the business
Protection against inflation through faster write-off of the value

Planning to use the degressive method requires an analysis of cash flows and the company's development strategy. Business owners should take into account the effect of higher depreciation costs on the financial result in the first years and the investments they plan.

One-off depreciation of fixed assets

One-off depreciation is the fastest way to settle an expense in costs – it lets you write off the whole value of a fixed asset (within the limits) in the year it is entered in the register. This solution is particularly attractive to small and medium-sized businesses.

One-off depreciation under de minimis aid (Article 22k(7) of the PIT Act) can be used both by business owners who started their business in a given tax year (provided that in that year and in the two preceding years they did not run a business on their own or in a partnership without legal personality, and their spouse did not run one under joint marital property – Article 22k(11)) and by so-called small taxpayers. Business owners can make depreciation write-offs up to the one-off depreciation limit of EUR 50,000 (PLN 213,000 in 2026, PLN 219,000 from 1 January 2027).

A small taxpayer is a taxpayer whose sales revenue, including output VAT, did not exceed in the previous tax year the PLN equivalent of EUR 2,000,000

One-off depreciation can cover only assets in groups 3-8 of the Classification of Fixed Assets, excluding passenger cars. This limit is designed to prevent abuse and to focus the benefit on fixed assets directly related to business activity.

Other options for one-off depreciation include:

Fixed assets with an initial value not exceeding PLN 10,000 can be charged directly to costs (Article 22d(1)) or depreciated in one go (Article 22f(3))
Brand-new fixed assets in KŚT groups 3-6 and 8 worth up to PLN 100,000
Real estate and means of transport are excluded from this form of depreciation
The assets must meet the definition of brand-new fixed assets

The law does not define the term "brand-new fixed assets", so you need to refer to the dictionary of the Polish language, where "new" means just made, unused, undamaged, recently acquired, freshly created. Items bought from other sellers can be treated as brand-new fixed assets if they have not been used before

Using one-off depreciation strategically requires investment planning and an analysis of the effect on the tax result. Business owners should take into account:

The level of revenue planned in the year of the investment
The availability of other tax-deductible costs
The option to carry losses forward to subsequent years
The effect on the company's cash flow

A practical example: A company starting its business bought a computer for PLN 8,000, a printer for PLN 3,000 and a server for PLN 15,000. The computer and the printer (each worth up to PLN 10,000) can be charged to costs in one go under Article 22d(1) or Article 22f(3), without using the de minimis limit, and the server can be covered by de minimis one-off depreciation. Altogether this gives a tax-deductible cost of PLN 26,000 in the first year of business.

Accumulated depreciation and tax optimisation

Accumulated depreciation (umorzenie) of fixed assets is a key element of every company's tax strategy. Managing it properly helps you plan the company's tax-deductible costs and tax burden better.

Accumulated depreciation shows the degree of wear of a fixed asset, more precisely how much its initial value has decreased as a result of systematic depreciation write-offs. This process directly affects the company's financial result and the amount of income tax.

Depreciation write-offs can usually be a tax-deductible cost, apart from exceptions such as write-offs on the part of a fixed asset's value financed by a grant (Article 23(1) point 45 of the PIT Act) or depreciation of a passenger car in the part above the limit – from 2026 PLN 100,000, PLN 150,000 where CO2 emissions are below 50 g/km and PLN 225,000 for electric and hydrogen cars (Article 23(1) point 4). The cost arising from a depreciation write-off reduces the income tax payable

Accumulated depreciation affects the tax wear of assets, whose book value is used up with each accounting period. When an item recorded as a fixed asset has been fully depreciated, you can still use it in the business, but you can no longer include its value in tax-deductible costs. We keep the fixed asset register, depreciation schedule and write-offs for clients as part of our accounting services.

Strategic aspects of accumulated depreciation include:

Planning when to put a fixed asset into use
Choosing the best depreciation method for each asset
Monitoring the degree of depreciation and planning reinvestment
Using the options to speed up or slow down depreciation

Exceptions to the rule that depreciation write-offs are tax-deductible require particular attention. They mainly concern:

The part of the value of fixed assets financed by grants or subsidies
Passenger cars in the part of their value above the limit (from 2026 PLN 100,000, PLN 150,000 or PLN 225,000)
Fixed assets used partly for private purposes
Assets covered by special legal rules

A practical example: In 2026 a business owner bought a passenger car with a combustion engine (CO2 emissions of at least 50 g/km) for PLN 200,000. They can charge only half of the depreciation write-offs to tax-deductible costs (100,000 / 200,000), and the rest will not be a cost. For an electric car, the PLN 225,000 limit would cover the whole value of the car.

Practical aspects of using depreciation

Using depreciation of fixed assets effectively in tax planning requires knowledge of how it works in practice. Business owners should take into account not only the legal rules but also the specifics of their business and their development strategy.

The key elements of using depreciation in practice are proper documentation of fixed assets, keeping a depreciation register and regularly monitoring the degree of depreciation of individual assets.

The documentation of fixed assets should include:

The purchase document stating the initial value
The KŚT classification and the reasons for it
The date the asset was put into use
The depreciation method chosen and the reasons for it
Documentation of any improvements or upgrades

Keeping the fixed asset register correctly is crucial to avoid problems with the tax authorities – without it, depreciation write-offs are not a tax-deductible cost (Article 22n(6) of the PIT Act). For each fixed asset, the register must include, among other things, the date of purchase and of putting into use, the KŚT symbol, the initial value, the rate and the amount of the write-offs (Article 22n(2))

Monitoring how depreciation works should include regular analysis of the effect of write-offs on the company's financial result and planning future investments with tax in mind as well.

The mistakes business owners make most often with depreciation:

Incorrect classification of fixed assets in the KŚT
Incorrectly determined initial value of the fixed asset
Wrong choice of depreciation method
No documentation justifying the use of accelerated depreciation
Incorrectly calculated depreciation write-offs

Planning investments in fixed assets should take into account not only the company's operating needs but also tax aspects. Business owners can plan their tax burden by:

Spreading purchases over time to maximise the tax benefits
Choosing fixed assets that qualify for one-off depreciation
Using accelerated depreciation for used assets
Planning upgrades and improvements that increase the value of fixed assets

Frequently asked questions

What is the minimum value of a fixed asset subject to depreciation?

The law does not set a minimum value for a fixed asset, but assets with an initial value not exceeding PLN 10,000 can be charged directly to costs without depreciation (Article 22d(1) of the PIT Act). Whether an item is a fixed asset depends on a useful life of more than one year.

Can the depreciation method be changed while the fixed asset is in use?

As a rule, no – you choose the method before depreciation starts and apply it until the fixed asset is fully depreciated (Article 22h(2) of the PIT Act). The exception is the switch from the degressive to the straight-line method, which follows directly from the law (Article 22k(1)). You can, however, lower the rate from the Schedule – from the month of entry in the register or from the first month of the following tax year (Article 22i(5)).

How do you prove that a fixed asset is used for the purposes of accelerated depreciation?

To prove that a fixed asset has been used, you need documents confirming that it was previously used by another entity for at least 6 months. This may be the previous depreciation register, service records or other evidence of use.

Is depreciation of a passenger car limited?

Yes. From 2026, write-offs are tax-deductible only in the part calculated on a value of up to PLN 100,000 (CO2 emissions of at least 50 g/km), PLN 150,000 (emissions below 50 g/km) or PLN 225,000 (electric and hydrogen cars) – Article 23(1) point 4 of the PIT Act; for cars entered in the register before 2026, the previous rules apply (including the PLN 150,000 limit for combustion cars). The part of the write-offs attributable to the value above the limit cannot be included in tax-deductible costs, which you should take into account when planning to buy company vehicles.

When should depreciation of a newly acquired fixed asset start?

Depreciation starts in the month following the month in which the fixed asset was entered in the fixed asset register (Article 22h(1) point 1 of the PIT Act). The entry must be made no later than in the month the asset is handed over for use (Article 22n(4)), so what matters is the date of putting into use and entry in the register, not the date of purchase or delivery.

Can one-off depreciation be used for all fixed assets?

No. De minimis one-off depreciation applies only to fixed assets in groups 3-8 of the Classification of Fixed Assets, excluding passenger cars, and it is subject to an amount limit and the requirement of small-taxpayer or business-start status. Apart from it, you can depreciate in one go fixed assets with an initial value of up to PLN 10,000 (Article 22f(3)) and brand-new fixed assets in groups 3–6 and 8 up to PLN 100,000 a year (Article 22k(14)).

What happens after a fixed asset is fully depreciated?

After full depreciation, the fixed asset can still be used in the business, but no further depreciation write-offs can be made. The asset stays in the register until it is liquidated or sold.

Depreciation of fixed assets in Poland: an effective way to lower tax