Tax-Deductible Business Expenses in Poland: Key Rules, Limits and Documentation Requirements

An invoice alone is not enough to make an expense deductible in Poland. Its business purpose, supporting evidence, and payment method all matter. This guide focuses on companies subject to standard corporate income tax (CIT); it does not cover revenue-based lump-sum taxation or the separate Estonian CIT regime. It explains the core deductibility rules, passenger car limits applicable from 2026, and adopted changes and proposals relevant to 2027.

The General Rule for Deductible Costs

Under Article 15 of the Corporate Income Tax (CIT) Act, a cost is deductible if it is incurred to earn revenue or to maintain or secure a source of revenue. The link to business activity may be indirect, but it must be real and defensible. Start with three core checks:

• Business purpose: the expense relates to your revenue-generating activity.
• Documentation: you hold appropriate evidence of the expense—usually an invoice, supported where relevant by a contract, proof of delivery, and proof of payment. An invoice is not the only possible form of evidence.
• No exclusion: the cost is not on the list of excluded expenses in Article 16 of the CIT Act.

These checks are the starting point. Payment rules, deduction limits, and timing requirements may also affect the amount and timing of the deduction.

Similar principles apply under personal income tax (PIT) where business income is taxed after deducting costs, although detailed rules differ. The Ministry of Finance publishes general information on the CIT system on podatki.gov.pl.

Costs That Are Commonly Not Deductible

A business connection alone does not guarantee deductibility. Statutory exclusions include the following:

• Representation costs: these are expenses whose sole or dominant purpose is to create or improve the company’s external image, and they are excluded. A meal with a client is not automatically representation simply because it takes place in a restaurant. A genuine business meeting may qualify, depending on its purpose and supporting evidence. Advertising and promotional expenses also require a case-by-case assessment.
• Public-law fines, penalties and interest on tax arrears: these are generally excluded under the CIT Act.
• PFRON contributions: contributions to the State Fund for Rehabilitation of Disabled Persons are not deductible.
• Certain contractual penalties and damages: Article 16(1)(22) excludes payments for defective goods, work or services, late delivery of defect-free goods, and delays in remedying defects. Other penalties require assessment of business rationale, interpretations and case law.

Company Cars: New Limits From 2026

Applicable Vehicle-Value Limits

From 1 January 2026, the limits on deductible depreciation of passenger cars and the corresponding limits for leasing, rental and similar agreements depend on the vehicle’s power source and CO2 emissions:

• PLN 225,000 for electric and hydrogen cars.
• PLN 150,000 for other passenger cars with combustion-engine emissions below 50 g CO2/km.
• PLN 100,000 for passenger cars with combustion-engine emissions of 50 g CO2/km or more. The applicable limit depends on the specific vehicle’s emissions, not simply whether it is described as a hybrid.

How the Limits Affect Depreciation and Leasing

If the car value used for the calculation exceeds the applicable limit, deductible depreciation is restricted proportionately. In operating leases, this value-based restriction applies to the part of the fee that repays the car’s value—not automatically to the entire instalment. For example, a car with a relevant value of PLN 200,000 and a PLN 100,000 limit gives a 50% deductible proportion for that value-repayment component. The calculation must take account of any non-deductible VAT.

Vehicles and Agreements Predating 2026

Cars entered in the taxpayer’s fixed-asset register before 1 January 2026 generally retain the previous depreciation limits. This transitional protection does not extend in the same way to operating leases or rental agreements merely because they were signed before 2026.

Running Costs and Private Use

Running costs for cars used for both business and private purposes are generally deductible at 75%. Full deduction of running costs requires exclusive business use, supported by the required evidence and records. It does not remove the depreciation or leasing value limits.

Documentation, KSeF and Cash Payments

KSeF Compliance and Cost Deductibility

An invoice issued outside the National e-Invoicing System (KSeF) does not, by itself, prevent deduction of a genuine business cost. General CIT conditions and supporting evidence still apply, while KSeF obligations must be assessed separately.

Payment Rules and Threshold

B2B transactions exceeding PLN 15,000 require payment through a payment account; amounts paid otherwise are non-deductible. Instalments do not change the threshold. Whether recurring payments form one transaction depends on the contract.

In 2026, payments outside the VAT White List or without mandatory split payment may also restrict deductions, subject to statutory conditions, exceptions and safeguards. Adopted 2027 changes are outlined below.

Timing: Direct and Indirect Costs

Direct costs, such as the cost of goods sold or subcontractor costs attributable to specific revenue, are generally deducted in the tax year when the related revenue is recognised, subject to statutory timing rules.

Indirect costs, such as general accounting fees or overheads, are generally deducted when incurred for tax purposes—not necessarily on the payment date. If an indirect cost covers a period extending beyond a tax year and the portion attributable to each year cannot be determined, it is allocated proportionately to the length of the period concerned. Specific rules may override these general principles.

Other Limits to Keep in Mind

• Debt financing costs: Article 15c generally limits net financing costs (qualifying costs less taxable interest-type income) above the higher of PLN 3 million or 30% of tax EBITDA. Review third-party and intra-group financing, including statutory exceptions, adjustments and other restrictions.
• Foreign currency costs: these are converted into PLN using the National Bank of Poland average rate from the last working day before the cost was incurred.
• Related-party transactions: costs must reflect arm’s length terms, and documentation may be required.

For questions about a specific situation, you can also consult the individual tax interpretations published on podatki.gov.pl.

Looking Ahead to 2027

As of 3 November 2026, the following adopted changes and pending proposals are relevant to cost documentation and payments. The table distinguishes enacted changes from a proposal that may still change.

What remains separate: VAT obligations and consequences remain separate from the income-tax changes, including potential joint liability for a supplier’s VAT arrears. The requirement to use a payment account for transactions exceeding the applicable cash threshold also remains.

The passenger car limits introduced in 2026 remain the starting point for assessing purchases and leases planned for 2027. Check the rules again before committing to a transaction, particularly where a budget depends on pending legislation.

How Leinonen Can Help

Leinonen team in Poland can review your cost structure, check supporting documentation against current rules, and help establish processes for recording deductible expenses correctly from the start. To find out more, get in touch with our team.