Depreciation is made, in equal instalments, each month, each quarter or as a once at the end of the year. The decision on the frequency of depreciation write-offs is made by the taxpayer. The said frequency cannot, however, be changed during the year (according to the Act of 15 February 1992 on corporate income tax). The changes can be used from the new year.
In case of the declining balance method, depreciation write-offs are higher than average (established with the straight-line method) in the initial periods of use of the fixed asset and gradually decrease. Depreciation write-offs will keep decreasing until the value of the written off loss becomes lower than the instalment established with the straight-line method. The taxpayer using the declining balance method is obligated to pay attention to the time (of the year) when they should switch to straight-line depreciation.
The taxpayer will be able to increase or decrease the depreciation rates multiple times. Changes in fixed assets that have already been put in the records is made in the first month of each consecutive fiscal year. Change of rates during the year is impossible. Rates can be changed only in the case of straight-line depreciation.
New business owners and small taxpayers can make one-time depreciation write-offs of fixed assets categorized as 3-8 of the Polish Classification of Fixed Assets (excluding passenger cars) up to the amount that will not exceed the equivalent of EUR 50,000. A single write-off is made in the fiscal year in which the fixed assets were put in the records. In 2025, this limit will be PLN 214,000 (compared to PLN 230,000 in 2024).
Micro, small and medium-sized businesses can determine the depreciation rates on an individual basis for internally generated tangible assets being non-residential buildings (premises) and structures classified in groups 1 and 2 of KŚT that were put in the records of fixed assets for the first time, as well as for intangible assets of the taxpayer in a situation when such a fixed asset is located within the territory of a commune:
Taxpayers can reduce the depreciation period to 5 or 10 years, depending on the unemployment rate.
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