Starting January 1 Drive and Pay Up New Government Rules Impact Car Owners
Starting January 1, 2026, significant new regulations will impact car owners, especially those conducting business. These changes will introduce new limits on tax deductions related to company vehicles, particularly for combustion engine cars.
Key Changes in Tax Deductions for Vehicles
- New Deduction Limits: The adjustments will implement three different limits based on carbon dioxide (CO2) emissions.
- Electric and Hydrogen Cars: A maximum deductible amount of 225,000 PLN will apply.
- Low Emission Vehicles: Vehicles with average CO2 emissions below 50 g/km will have a limit of 150,000 PLN.
- High Emission Vehicles: Combustion engine cars with emissions of 50 g/km or more will see a reduced limit of 100,000 PLN.
Current vs. New Tax Deduction Limits
| Vehicle Type | Current Limit (PLN) | New Limit (PLN) |
|---|---|---|
| Electric/Hydrogen Cars | 225,000 | 225,000 |
| Low Emission Vehicles (CO2 | 150,000 | 150,000 |
| Combustion Engine Vehicles | 150,000 | 100,000 |
Current laws allow entrepreneurs to deduct vehicle costs up to 150,000 PLN for combustion engine cars. However, with the new regulations, this cap will drop to 100,000 PLN for vehicles that do not meet lower emission standards.
Financial Implications for Business Owners
Business owners operating combustion engine vehicles will face increased tax burdens post-January 2026. The lower deductible limit means higher taxable income, resulting in a larger tax bill. For instance, under the 19% corporate income tax (CIT), this could lead to almost 9,500 PLN more owed to the tax office for a vehicle worth 150,000 PLN.
Experts advise that businesses should consider purchasing vehicles before the year-end of 2025 to benefit from existing tax rules. This strategy allows them to maintain the higher deduction limits currently in place.
How to Mitigate Potential Losses
- Purchase vehicles outright before January 2026.
- Opt for electric or low-emission cars to benefit from higher deduction limits.
Among the changes, only hybrid vehicles with CO2 emissions below the threshold will retain the higher limit of 150,000 PLN. Regulations are not expected to change, as they align with broader international trends promoting low-emission transportation.
Conclusion
With the new government rules impacting car owners starting January 1, 2026, businesses must adapt to avoid financial repercussions. Enhancing awareness and understanding of these limits is crucial for financial planning in the automotive sector.
