Car Depreciation Calculator

Under the Polish Fixed Asset Classification (KST group 7), passenger cars are depreciated at 20% per year (5-year life). Under the declining balance method, the initial rate doubles to 40%, switching to straight-line when it becomes more advantageous.

The tax-deductible cost (KUP) limit is 150,000 PLN for petrol and hybrid cars and 225,000 PLN for fully electric vehicles (BEV). Depreciation on the amount above the limit is not tax-deductible.

Car depreciation is the systematic allocation of a vehicle's purchase cost to tax-deductible expenses over its useful life. Instead of deducting the full purchase price in year one, the business claims an annual depreciation charge until the vehicle is fully written off.

Straight-line gives equal annual charges. Declining balance applies a fixed rate to the current net book value, producing higher charges early on and lower charges later — advantageous from a tax perspective in the first years of the vehicle's life.

Yes. Under a finance lease the vehicle appears on the lessee's balance sheet and is depreciated using the standard rules (20% rate, 150,000 PLN KUP limit). The depreciation charge and the interest element of the lease payment are deductible costs. Under an operating lease, the full net lease payments are deductible costs, also subject to the KUP limit.

Yes. For fully electric vehicles (BEV) the KUP limit is 225,000 PLN rather than 150,000 PLN. This applies to both depreciation charges and lease payments included in costs.

The switch happens automatically in the year when the straight-line charge on the remaining depreciable balance (net book value / remaining years) equals or exceeds the declining balance charge (net book value x rate). This ensures the car is fully depreciated within the planned period.

Annual tax saving = KUP-deductible charge x tax rate. At CIT 19%: a KUP charge of 30,000 PLN saves 5,700 PLN in tax per year. For sole traders taxed at the flat 19% PIT rate the effect is the same; under the progressive scale it depends on the applicable tax bracket.

No. Polish tax law prohibits changing the depreciation method once the asset is placed in service. The method must be applied consistently until the vehicle is fully written off. It is possible to change the depreciation rate (increase or decrease it within the statutory limits) from the following tax year.

Results are for informational purposes only. KUP limits, depreciation rates and rules for deductible costs may change. Consult a qualified accountant or tax adviser before making tax or financial decisions.