Poland: Depreciation rates can be adjusted any time before limitations period expires (court decision)

A taxpayer can decrease depreciation rates for the year in progress.

Any time before limitations period expires (court decision)

The Supreme Administrative Court on 3 February 2022 issued a decision (case file II FSK 1413/19) confirming that under Article 16i(5) of the corporate income tax law, taxpayers can adjust depreciation rates for periods for which the statute of limitation has not yet expired.

This is a case of first impression from the Supreme Administrative Court.


The Supreme Administrative Court confirmed that under Article 16i(5) of the corporate income tax law, a taxpayer can decrease depreciation rates for the year in progress. The only requirement is that the adjustment must apply from the first month of each tax year.

In other words, the taxpayer can make an adjustment to the claimed depreciation rate at any time before the taxpayer begins to make the depreciation write-offs, and this treatment must apply retroactively. The ability to correct the tax return is only restricted by: (1) the statute of limitations for assessing the tax liability; and (2) the maximum depreciation rates specified in the “list of annual depreciation rates” (an appendix to the corporate income tax law).

Currently, tax periods for which deprecation rate adjustments can be potentially be made, pursuant to the court’s decision, begin with 2016 (that is, for calendar year taxpayers). 

KPMG observation

Tax professionals have observed that the decision can provide relief for taxpayers that make depreciation write-offs on fixed assets using the depreciation formula (based on the depreciation rates provided by the list of annual depreciation rates) and that incurred past losses or for taxpayers that, for the periods outside the statute of limitations, had no ability to use previously incurred losses due to insufficient income. Taxpayers that have incurred past losses—the amount of which may be affected by the depreciation of fixed assets—need to consider calculating the effects of a possible reduction in depreciation rates for past years and any adjustments that would allow for amended returns to be filed for previous years. 

Lastly, the Supreme Administrative Court’s decision also confirms that entrepreneurs may carry forward losses incurred due to the coronavirus (COVID-19) pandemic.

Read a February 2022 report prepared by the KPMG member firm in Poland


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