For many sole proprietorships a car is one of the largest expenses, and the way it is accounted for directly affects the tax due. As of 1 January 2026 the rules for deducting passenger cars have changed — CO2 emissions are now the key factor. We explain which limits now apply to purchase and leasing, what happens to cars brought into the business earlier, and how to account for operating costs and VAT.
New depreciation limits from 2026
A passenger car classified as a fixed asset is depreciated on a straight-line basis at 20% per year, that is over five years. However, not the entire value of the car can be deducted — an upper limit applies. Until the end of 2025 it was PLN 150,000 for combustion cars and PLN 225,000 for electric ones. From 2026 the limit depends on emissions and is split into three tiers: PLN 225,000 for electric and hydrogen-powered cars, PLN 150,000 for cars whose combustion-engine CO2 emission is below 50 g per kilometre, and PLN 100,000 where the emission is equal to or higher than 50 g per kilometre.
In practice, only electric cars and some plug-in hybrids meet the below-50 g CO2/km threshold. This means a typical new combustion car or classic hybrid falls under the lowest limit of PLN 100,000. The changes are based on a law passed back in 2021 as part of the Polski Ład package, and the Ministry of Finance has confirmed it does not plan to amend it.
Cars brought into the business before 2026
If you bought a car and entered it into the fixed asset register by the end of 2025, you account for it under the previous rules — the higher limit of PLN 150,000 remains in force until depreciation ends. So for entrepreneurs not planning to replace their fleet, practically nothing changes. The Ministry of Finance stressed, however, that what counts is the actual entry of the car into the fixed asset register (putting it into use), not the mere registration of the vehicle or the date the contract was signed.
Leasing and rental — the lower limit also covers older contracts
It is different with operating leasing, rental and lease. A vehicle used under such a contract is not entered into the entrepreneur's fixed asset register, which is why from 2026 the new, lower limits apply to it — even if the contract was concluded earlier. The date of the leasing contract is irrelevant: if the car does not meet the emission standards, in 2026 you can deduct a value capped at PLN 100,000 rather than PLN 150,000.
It is worth remembering that the limit applies only to the capital part of the leasing instalment (which reflects the car's value). The interest part of the instalment and ongoing running costs can be deducted under general rules, without this restriction.
Operating costs and VAT deduction
Regardless of the depreciation limits, separate rules cover operating expenses — fuel, servicing, insurance, parts or fees. If you use the company car for mixed purposes (business and private), you can deduct 75% of these expenses. You can deduct the full 100% of operating costs only when the car serves the business exclusively, which requires keeping a mileage log and registering the vehicle on the VAT-26 form.
Analogous rules apply to VAT. An active VAT payer deducts 50% of the tax on the purchase or leasing instalment when the car is also used privately. The full 100% is available only when the vehicle is used solely for business and the formal requirements are met (mileage log, VAT-26). The rules for deducting VAT on passenger cars remain unchanged at least until the end of 2028. The non-deducted part of VAT is not lost — on purchase it increases the car's initial value and is accounted for through depreciation, and with leasing it increases deductible costs.
Private car used in the business
If you do not bring the car into the business but merely use your private car for business purposes, you can deduct only 20% of the expenses related to its use and operation. This solution is sometimes simple, but with intensive use of the vehicle it is usually less advantageous than bringing the car into the business. The right option is worth calculating individually, taking into account the car's value, its emissions and the planned mileage.