Changes in depreciation beneficial for companies.  What will the new government do?

Changes in depreciation beneficial for companies. What will the new government do?

The outgoing government of Mateusz Morawiecki adopted and submitted to the Sejm a draft amendment to the PIT and CIT taxation system at the last minute, which is beneficial for many entrepreneurs.

Mateusz Morawiecki’s government, even before its dissolution, managed to submit to the Sejm a draft amendment to PIT and CIT, assuming a two-fold increase in depreciation limits. The changes would come into force on 1 January 2024 and would cost the budget PLN 1.4 billion.

Business Insider Polska writes about the amendment, pointing out that the first change assumes an increase (from PLN 10,000 to PLN 20,000) of the limit on the value of assets, which allows for a one-time inclusion of expenses for the purchase of these assets as tax deductible costs. In addition, the amendment proposed an increase (from EUR 50,000 to EUR 100,000) of the limit on the value of depreciation write-offs included as one-off costs of obtaining income by small taxpayers and taxpayers who started their business in the tax year from the initial value of fixed assets included in the so-called groups 3–8 of the Classification of Fixed Assets (machinery, equipment and means of transport), excluding passenger cars.

The third change concerns the increase (from PLN 100,000 to PLN 200,000) of the limit of depreciation write-offs included on a one-time basis as costs of obtaining income from the initial value of brand-new fixed assets included in the so-called groups 3–6 and 8 of the Classification of Fixed Assets (machinery and equipment).

PiS wants to encourage companies to invest in this way. Piotr Juszczyk, InFakt’s chief tax advisor, indicated in an interview with Business Insider Polska that the proposed solutions would be beneficial for entrepreneurs. The bill itself was submitted to the Sejm on December 11 and it is not yet known what its future holds and whether the government coalition will vote for the proposed changes.