Deductible business expenses (KUP) in Polish self-employment
Rules for deducting business expenses (KUP) in 2026: passenger cars, entertainment and documentation.
Deductible business expenses (KUP) reduce the taxable base in self-employment. Correct handling determines the amount of tax due and the level of safety during a tax audit. In 2026 the general rules remain stable, but tax authorities increasingly verify the actual link between the expense and the business activity.
What can be treated as KUP
The general rule under the PIT Act is that an expense qualifies if it is reasonably connected with generating revenue or securing its source, properly documented and not on the list of exclusions. In practice this means holding a VAT invoice (or a regular receipt) and being able to demonstrate the business purpose of the expense during an audit.
The Act contains numerous limitations. A passenger car used in mixed mode allows only 75% of operating costs to be deducted, and depreciation is capped at PLN 150,000 of the vehicle value (PLN 225,000 for electric cars). Entertainment expenses — upscale dinners with counterparties, expensive gifts — are fully excluded from KUP under art. 23 of the PIT Act.
- Purchase of goods, materials and services directly related to the business.
- Operating lease of a passenger car — capped at PLN 150,000 of vehicle value.
- Entrepreneur's social ZUS contributions (excluding the health premium).
- 75% of running costs for a passenger car in mixed business-private use.
- Excluded from KUP: entertainment, fines, and penalties payable to the State.
Rates and thresholds are updated annually; consult an accountant before making a decision.