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On 1 January 2026, businesses face significant changes to deducting tax costs associated with passenger cars. The changes cover depreciation and leasing limits and will particularly affect companies using combustion-engine vehicles. Find out exactly what is changing and whether it is worth buying a company car before the end of this year.
Current tax limits for company cars
Two tax limits currently apply:
- PLN 225,000 for electric and hydrogen cars,
- PLN 150,000 for other passenger cars.
They apply both to depreciation of company cars and to the principal component of company car lease payments. Amounts above these limits cannot be deducted for tax purposes.
If you buy or rent a car worth less than the applicable limit, you can deduct all depreciation charges or lease payments. For a more expensive car, a proportion must be applied. Divide the limit by the vehicle's value to obtain the coefficient determining what portion of each monthly depreciation charge or lease payment is deductible.
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Changes from 1 January 2026: new limits
Unfortunately, the scope for these deductions will be restricted next year. Provisions reducing the limit from PLN 150,000 to PLN 100,000 were introduced at the end of 2021 as part of an electromobility package, but their commencement was postponed until 2026, so many people have forgotten about them.
Under the changes, the following limits apply from next year:
- PLN 150,000 for vehicles with CO₂ emissions below 50 g/km,
- PLN 100,000 for passenger cars with emissions equal to or above 50 g/km.
The PLN 225,000 limit for electric and hydrogen vehicles remains unchanged.
What does this mean?
If your combustion-engine car emits more than 50 g CO₂/km, as most models on the market do, you can deduct only PLN 100,000 of its value. The remainder cannot be taken into account when calculating income tax.
This applies to rental and operating lease contracts as well as depreciation, and therefore also finance leases where the car immediately becomes your property and is recorded as a fixed asset.
The changes aim to promote low-emission vehicles. Businesses not choosing environmentally friendly cars will have to accept a lower tax-deductible cost limit.
Example
In 2026, you buy a company passenger car worth PLN 200,000 gross and enter it in the fixed asset register. Depending on your form of taxation, your deductible costs will be approximately PLN 10,000–12,000 lower.
| PLN 150,000 limit | PLN 100,000 limit | Difference |
Progressive tax scale (12% + 9%) | 150,000 × 21% = PLN 31,500 | 100,000 × 21% = PLN 21,000 | –PLN 10,500 |
Flat-rate income tax (19% + 4.9%) | 150,000 × 23.9% = PLN 35,850 | 100,000 × 23.9% = PLN 23,900 | –PLN 11,950 |
If you operate through a company subject to CIT, such as a limited partnership or limited liability company:
| PLN 150,000 limit | PLN 100,000 limit | Difference |
CIT 9% | 150,000 × 9% = PLN 13,500 | 100,000 × 9% = PLN 9,000 | –PLN 4,500 |
Flat-rate income tax (19% + 4.9%) | 150,000 × 19% = PLN 28,500 | 100,000 × 19% = PLN 19,000 | –PLN 9,500 |
What will not change?
The good news is that the changes do not affect insurance premiums.
For mandatory third-party liability insurance, the entire premium remains deductible, even if the car is worth substantially more than the limit.
For insurance whose premium depends on the vehicle's value, such as comprehensive motor insurance (AC) and GAP, the PLN 150,000 limit remains. Even for higher-emission vehicles, this cost will not require further restriction.
Fuel and other vehicle operating expenses, such as servicing, parts and repairs, can still be deducted under unchanged rules: 75% of these amounts may be tax-deductible.
What about company cars used before 2026?
The amendment includes transitional provisions for company cars used before 2026. Vehicles entered in the taxpayer's fixed asset register before the new provisions take effect remain subject to the previous rules.
If you bought or still buy a passenger car worth up to PLN 150,000 by the end of 2025, you can therefore deduct all depreciation charges, including from 1 January 2026.
If the car is worth more than PLN 150,000, from 1 January 2026 you will use the existing proportion calculated by dividing PLN 150,000 by the car's value. This concerns deducting depreciation charges, so it may involve a standard purchase or acquisition under a finance lease.
Unfortunately, there is no equivalent safeguard for operating leases. Under an operating lease, the vehicle does not become the business's fixed asset and is not entered in its fixed asset register. Lease payments can therefore be deducted under the old rules until the end of 2025, but a new proportion must be calculated from the following year.
Remember that all changes concern the principal component of lease payments. Interest can be deducted in full, including non-deducted VAT.
Operating leases and company car depreciation in large enterprises
Companies that do not meet the definition of a micro or small entity must classify vehicles in two ways:
- For accounting purposes, the car is a fixed asset depreciated over its expected useful life, even when held under an operating lease;
- For tax purposes, it is a service providing use of the vehicle.
Signing an operating lease in 2025 does not guarantee the right to the existing higher tax limits if the vehicle is not entered in the tax fixed asset register before 1 January 2026. Recording it on the balance sheet alone does not meet the transitional conditions. Thus, although treated as a fixed asset for accounting, an operating lease remains a rental service for tax purposes.
To retain the higher limits for lease contracts, the vehicle must be entered in the fixed asset register for tax purposes by the end of 2025, which in practice requires acquiring ownership of it.
If you found this article interesting, explore our tax advisory services and read how we can help you:
Summary
The end of 2025 is the last opportunity to optimise the cost of acquiring a company car. If you are planning to buy or lease one, consult a tax adviser and consider making the investment in 2025. From January 2026, the new limits will reduce tax benefits, particularly for combustion-engine cars, including many hybrids. If you are planning to buy or lease a company car and need help analysing profitability in light of the 2026 tax changes, contact our team.
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