Company Car in 2026 – Cost Limits for Purchase and Leasing
Yes — in 2026, previously established limits on the value of cars that can be included in tax-deductible costs remain in force: PLN 150,000 for combustion-engine and hybrid cars, and PLN 225,000 for electric and hydrogen-powered cars. These limits result from the provisions of the income tax acts (PIT and CIT) and apply both to purchases and to settling the capital portion of lease installments; any surplus above the threshold does not constitute a tax-deductible cost.
What cost limits apply to purchasing a passenger car in 2026
The legal basis is formed by the provisions of the Personal Income Tax Act, as well as analogous regulations in the Corporate Income Tax Act (CIT). These limits have been in effect since January 1, 2019, and the amounts have not changed since then.
In practice, this means that if a company buys a combustion-engine car for PLN 250,000, it can only include depreciation write-offs for the portion corresponding to PLN 150,000 in tax-deductible costs. The remaining PLN 100,000 of value will not be a tax-deductible cost — regardless of the depreciation period.
The proportion is applied already when the vehicle is entered into the fixed assets register: the accounting department determines the share of the limit in the initial value and applies the same proportion to each subsequent depreciation write-off.
How the limit affects lease installments and the initial payment
The limitation applies to the capital portion of lease installments. In operating leases, the interest portion of the installment is usually fully tax-deductible, while the capital portion is subject to proportional limitation according to the above thresholds. This is a common source of errors in settlements.
Example (hypothetical data): a company leases a combustion-engine car worth PLN 200,000 net. The PLN 150,000 limit gives a proportion of 75%. If the monthly capital installment is PLN 4,000, PLN 3,000 will be tax-deductible, and PLN 1,000 will not be included in costs.
The same rule applies to the initial payment (down payment). If the payment is PLN 40,000 and the limit proportion is 75%, PLN 30,000 will be deductible.
Operating lease vs. finance lease – differences in applying the limit
In an operating lease, the capital portion of the installment is subject to the limitation, while interest can usually be fully included in costs. In a finance lease, the car is immediately entered into the lessee's fixed assets register, so the limit is applied as with a purchase — to the initial value and depreciation write-offs.
If the lease agreement was concluded before January 1, 2019, special transitional rules may apply — in such a case, it is worth consulting with your accounting department before settling current installments.
Electric and hybrid cars – higher limit and additional conditions
The increased limit of PLN 225,000 applies exclusively to fully electric and hydrogen-powered cars. Hybrids, including plug-in hybrids (PHEV), do not qualify for this threshold and are subject to the PLN 150,000 limit.
What matters is the type of drive as defined by law — the commercial name "hybrid" alone, or the presence of electric components, is not sufficient to apply the higher limit.
VAT on passenger cars – the 50% and 100% deduction rules in 2026
The rules for VAT deduction are governed by the Goods and Services Tax Act. As a general rule, expenses related to a passenger car are subject to a 50% VAT deduction — this applies to the purchase, lease installments, fuel, and servicing.
A full, 100% VAT deduction is possible only when the vehicle is used exclusively for business activity. This requires keeping detailed vehicle mileage records (the so-called VAT mileage log) and registering the car using the VAT-26 form with the head of the tax office. Occasional private use undermines the right to a full deduction and may result in a correction of the settlements.
Planned changes to the taxation of company cars after 2026 – what is certain and what is just a proposal
Proposals linking cost limits to CO2 emissions appear in public debate, but as of the publication date of this article, no such changes have been enacted or entered into force — the thresholds of PLN 150,000 and PLN 225,000 remain in effect. Before making a decision about purchasing or leasing a fleet, check official announcements at podatki.gov.pl and draft bills at the Government Legislation Centre (Rządowe Centrum Legislacji).
The most common mistakes entrepreneurs make when settling passenger car costs
- Incorrect calculation of the proportion for leasing — failing to split the installment into capital and interest portions.
- Overlooking the limit when buying out a car at the end of a lease — treating the buyout as an unconditional fixed asset without redetermining the initial value.
- Incorrectly classifying a hybrid as an electric car and applying the PLN 225,000 limit instead of PLN 150,000.
- Failing to keep mileage records when the vehicle is declared as used exclusively for business purposes — this makes it impossible to defend a full VAT deduction during an audit.
Questions and Answers
Does the PLN 150,000 limit apply to the net or gross value of the car?
It depends on the taxpayer's VAT status. If the company deducts VAT, the limit applies to the net value increased by the non-deductible portion of VAT. If the company is not a VAT payer or is not entitled to deduct VAT, the limit applies to the gross value (including VAT).
How should the buyout of a leased car at the end of the agreement be settled in terms of the cost limit?
The buyout is treated as a separate acquisition of a fixed asset. It is necessary to re-determine whether the buyout value falls within the limit, and if it exceeds the threshold — to apply the proportion to depreciation just as in a standard purchase.
Does the cost limit change if the car is used both privately and for business?
The amount-based limit itself (PLN 150,000 or PLN 225,000) does not depend on the manner of use. However, mixed use affects the VAT deduction rules — in such a situation, the standard 50% VAT deduction applies, regardless of the income tax cost limit.
What happens if a company buys an electric car worth more than PLN 225,000?
The surplus above PLN 225,000 will not constitute a tax-deductible cost. Depreciation write-offs must be proportionally limited to the threshold.
Are the announced changes to CIT regarding CO2 emissions already in force in 2026?
No. These are currently proposals under public discussion, not binding regulations. In 2026, companies apply the PLN 150,000 and PLN 225,000 limits without any additional emission-based criteria.
If you are planning to purchase or lease a company car and want to check how the limits will affect your settlements, contact LORICA Prawo i Rachunkowość.
Sources
Photo: David McBee / Pexels
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