One-time depreciation - amended tax regulations

The Act of 7 July 2017 amending the Personal Income Tax Act and the Corporate Income Tax Act introduces the possibility of one-off depreciation on acquired, brand new machinery and equipment included in groups 3-6 and 8 of the Classification of Fixed Assets. Therefore, the investment relief does not cover the purchase of real estate and means of transport. The initial value of the fixed asset should be at least PLN 10. The PLN 10 threshold may be met by purchasing at least two fixed assets, with the initial value of each individual investment exceeding PLN 3.500.

Advances made for the purchase of a fixed asset with a minimum value of PLN 10 under a purchase or lease agreement are recognized directly as tax deductible costs and reduce the amount of the one-time depreciation write-off at the time of delivery of the fixed asset. In the event of resignation from making a one-off depreciation write-off of a fixed asset, the advance payment charged to tax costs should be adjusted by increasing revenues on the day on which the depreciation write-off was made according to another depreciation method or the fixed asset was sold.

The right to apply a one-off depreciation on acquired fixed assets and to credit payments made due to title. the acquisition of a fixed asset directly to tax deductible costs has, however, been limited by a limit. The sum of one-off depreciation write-offs and the sum of advance payments for the purchase of fixed assets may not exceed PLN 100 in total in the tax year in which these assets were entered into the register of fixed assets and intangible assets. When the limit is exceeded, the general rules for calculating depreciation apply. For partnerships, the limit of PLN 100 applies to all partners jointly.

The amended regulations have been in force since August 12, 2017 and apply to payments made for the purchase of fixed assets and the acquisition of fixed assets from January 01, 2017, also for taxpayers whose tax year is not the same as the calendar year and ended before 12 August 2017.

Conditions for applying one-time depreciation of fixed assets:

1. Fixed assets are acquired, brand new machines and devices from groups 3-6 and 8 of the Classification of Fixed Assets.
2. The acquisition may be in the ownership or co-ownership.
3. The initial value of the fixed asset is at least PLN 10.000.
4. The total initial value of several fixed assets is at least PLN 10.000, with the initial value of each of them exceeding PLN 3.500.
5. The sum of one-off depreciation write-offs and the sum of advance payments for the purchase of fixed assets may not exceed a total of PLN 100 thousand in the tax year in which these assets were entered into the register of fixed assets and intangible assets.