Tax-Deductible Costs (KUP) for Sole Proprietorship (JDG) in Poland in 2026

Three conditions for a cost

An expense should:

1. serve to earn, preserve or secure a source of income,
2. be definitively incurred by the taxpayer and documented,
3. not be excluded under Art. 23 of the PIT Act.

The specific purpose and circumstances are assessed. The statement "if it helps you earn, it's a cost" is too broad.

Who deducts costs

Costs reduce income in a JDG taxed with:

• the tax scale,
• flat tax.

On the lump-sum tax (ryczałt), expenses do not reduce PIT, although documents may still be needed for VAT, fixed assets and other obligations.

Equipment and furnishings

A computer, phone, furniture, machinery, tools and software can be a cost if they serve the business.

For an item that meets the definition of a fixed asset:

• an initial value of up to 10,000 zł usually allows a one-off recognition or optional depreciation,
• above 10,000 zł, record-keeping and depreciation apply, unless a special one-off method is available.

The threshold concerns the initial value. For an active VAT taxpayer it is usually the net amount within the scope of deductible VAT; for a taxpayer with no right to deduct, the value includes VAT.

Office and working from home

The following can be a cost in an appropriate proportion:

• rent,
• energy,
• internet,
• furnishings,
• charges related to premises used in the business.

There is no statutory rule that the deduction must always correspond exclusively to the floor area of a separate room. The proportion should be reasonable and match the actual use. You cannot shift entire private housing expenses to the business without justification.

Passenger car

The owner's private car

If the car belongs to the entrepreneur but is not a fixed asset, generally 20% of the expenses related to its use and of the insurance premiums is a cost.

The former PIT mileage allowance of 1.15 zł/km is not applied to the private car of a JDG owner.

Company or leased car

With mixed use, operating expenses are generally subject to a 75% limit. With actual exclusive business use and the record-keeping required for VAT, 100% is possible.

Insurance has separate rules and not every premium is automatically limited to 75%.

Value limits

In 2026, the limits on depreciation and on the corresponding part of leasing payments depend on the drive type and emissions:

• 225,000 zł — an electric or hydrogen vehicle,
• 150,000 zł — a combustion-engine car with CO₂ emissions below 50 g/km,
• 100,000 zł — a combustion-engine car with emissions of at least 50 g/km.

You should not apply a single 150,000 zł limit to every car.

VAT on fuel and car expenses

An active VAT taxpayer generally deducts:

• 50% of VAT with mixed use,
• 100% of VAT with exclusive business use after meeting the conditions.

There is no annual limit of 15,000 zł on deducting VAT on fuel. Non-deducted VAT increases the PIT cost base if the expense is a cost.

Training and education

Training can be a cost if it develops competences needed in the current business. Expenses on acquiring general education or pursuing a private hobby are risky.

You have to demonstrate a link with the scope of services, revenue and planned activity. There is no general monetary limit, but the absence of a limit does not mean automatic acceptance.

Marketing and representation

The following can be a cost:

• online advertising,
• website, hosting and domain,
• promotional materials,
• campaigns run by an agency,
• justified samples and promotional items.

Representation expenses are excluded. The outcome is not decided by the mere word "dinner" or the price of a gift. What matters is the purpose, nature and circumstances of the expense.

The 100 zł limit for certain free-of-charge transfers in VAT is not a universal limit on the cost of a gift in PIT.

Clothing

Ordinary clothing that can be worn privately is generally a personal expense. A cost can be protective, specialist or unambiguously company clothing which, through permanent marking and its nature, loses its personal character.

A small logo alone is not always enough.

Business travel

The following can be related to the business:

• tickets,
• accommodation,
• local transport,
• conference fees,
• the entrepreneur's per diems up to the amount applicable to employees.

The entrepreneur's accommodation is settled on the basis of the actually incurred and documented expense. You should not mechanically describe the employee's hotel limit from a business trip as the maximum cost of the entrepreneur's invoice.

Foreign services and subscriptions

The cost of a foreign service requires the correct exchange rate and a VAT check. Import of services may require settlement of output VAT even for an exempt taxpayer.

Purchasing a service from an EU contractor may require prior VAT-EU registration. The lack of a right to deduct means that the settlement is not always neutral.

ZUS and health contributions

The entrepreneur's social contributions can be deducted from income or recognized as costs, if they have not been settled in another way.

The health contribution:

• on the tax scale, is neither a cost nor a deduction from income,
• on flat tax, can be a cost or a deduction from income up to the statutory limit of 14,100 zł in 2026,
• on the lump-sum tax (ryczałt), 50% of the paid health contribution can reduce business revenue.

The 14,100 zł limit does not cap the amount of the health contribution due — it concerns its tax treatment on flat tax.

Documentation

Proof can be an invoice, a bill, a contract, proof of payment or an internal voucher in cases permitted by the rules. Not every cost requires a VAT invoice and not every seller issues a "bill up to 450 zł".

A receipt with the buyer's NIP up to 450 zł can be a simplified invoice, but the 450 zł threshold is not a limit on a bill from a person who is not a VAT taxpayer.

In the description it is worth indicating:

• the purpose of the purchase,
• the project or client,
• the period of use,
• the way the proportion was calculated,
• the people attending and the topic of the meeting, if relevant.

A transfer confirmation proves payment, but on its own it does not always replace the document required for booking.

What not to book automatically

• private purchases,
• fines, tickets and public-law sanctions,
• repayment of loan or borrowing principal,
• representation expenses,
• income tax,
• costs reimbursed to the entrepreneur,
• expenses unrelated to the business.

Contractual penalties require a separate analysis. Not every one is a cost, but you also cannot equate every contractual penalty with a fine.

The most common mistakes

1. Treating every invoice with a NIP as a cost.
2. Settling a private car with the mileage allowance.
3. Applying a single 150,000 zł limit to cars.
4. Inventing an annual 15,000 zł VAT limit on fuel.
5. Treating every dinner as representation without analyzing the purpose.
6. Deducting the entire apartment for partial business use.
7. Treating the 10,000 zł threshold as always being the net amount.
8. Capping the health contribution due at 14,100 zł.
9. Booking costs on the lump-sum tax (ryczałt) as reducing PIT.

Sources

• PIT Act — text in ISAP
• Podatki.gov.pl — tax-deductible costs

Want to check a cost before booking it?

Oxyok handles JDG accounting and verifies expenses before recognizing them in the KPiR. Accounting costs from 49 zł + VAT per month.

Write to Paweł or see Oxyok accounting.

This material is general in nature. Whether something is a cost depends on the document, the purpose, the form of taxation and the circumstances.