Can premises and residential buildings used for business purposes be depreciated?

At the same time, the classification of fixed assets should be made on the basis of the Ordinance of the Council of Ministers of October 3, 2016 on the Classification of Fixed Assets (hereinafter: the “Ordinance”). Interestingly, this issue is not regulated by the tax law, so the relevant classification cannot be the subject of individual interpretation, in case of doubts about the correct classification, the taxpayer can request it from the Statistical Office.

For example, the Director of National Tax Information, in an individual interpretation dated February 10, 2023 (Ref: 0115-KDIT3.4011.50.2023.1.JS), indicated that:

“It is impossible to agree with the Applicant’s position, according to which a residential premises, which is a fixed asset, entered in the records of fixed assets with the symbol KŚT-122, and used exclusively for the operation of a bailiff’s office, despite the fact that it is not classified as a commercial premises, can be depreciated and is not affected by the provision of Article 22c(2) of the Personal Income Tax Law. In addition, the mere fact that the Applicant uses the dwelling for utility/non-residential purposes (he runs a bailiff’s office in it) does not automatically change the classification/type of this property”.

A similar position was expressed in an individual interpretation dated December 23, 2022 (ref.: 0113-KDIPT2-1.4011.888.2022.1.ID), in which the tax authority held that a taxpayer operating a law office in premises classified as residential in the TINC does not have the ability to make depreciation deductions on this fixed asset. Currently, the case in question is subject to administrative court proceedings, the WSA in Cracow issued a judgment (ref.: I Sa/Kr 253/23 – a non-final ruling), by virtue of which it revoked the discussed individual interpretation. The Cracow court did not directly support the correctness of the taxpayer’s position, but only pointed out the lack of sufficient justification of the interpretation issued by the Director of the KIS, nevertheless the issued judgment gives hope that in the future the tax authorities, influenced by the jurisprudence of administrative courts, will change their previous approach.

Depreciation of buildings

Also, residential buildings used for business activities have been banned from depreciation as of 2023, but we note that according to the definition in the Polish Classification of Structural Objects, residential buildings are those structures with at least half of the total floor area used for residential purposes. From this definition, it follows that if less than half of the total floor area is used for residential purposes, then such a building should be classified as non-residential and thus will be eligible for depreciation.


The taxpayer purchased a single-family residential building with the first floor used for business. The notarial deed states that the residential part, which is located on the first floor, will be used for the taxpayer’s residential purposes, while the first floor will be used as a warehouse. The usable area of the building is 200 sqm, of which 50% is the residential area, and the other part is the first floor, which is the premises for the business.

According to the definition in the CSE Regulation, if at least half of the building is residential, it is classified as CSE 11, which means that it is a residential building. Thus, in the above example, the building should be classified as a residential building not subject to depreciation.

On the other hand, if more than 50% of the building’s area is used for business purposes, the taxpayer could classify the building as a non-residential building, and thus depreciate the part of the building intended for use in business.

The above is confirmed, among other things, in an individual interpretation by the Director of National Tax Information dated August 17, 2023 (Ref: 0114-KDIP3-2.4011.559.2023.3.MG), in which the authority stated that:

“The residential building purchased in 2021 has been entered into the records of fixed assets in the Applicant’s company, in part depreciated for tax purposes until the end of 2022, in accordance with the transitional provisions introduced by the Polish Deal. The Applicant plans to expand the aforementioned building. After the construction work, which will last for a longer period of time, the building will change its character significantly. The use will also change, and consequently the classification of the building as a service and residential building will change. According to the definition in PKOB, the building will be classified as non-residential after the expansion (the usable area for residential purposes will be about 33% of the total usable area of the building). The building will be classified, after the expansion, in the NACE 103 (commercial and service buildings). After the expansion, the part of the building that will be used for business purposes, i.e. according to the project, the first floor of the existing building plus the added part, will be subject to depreciation. The premises in the building do not have separate ownership, they are jointly owned.

Thus, the Applicant will be able to include depreciation deductible on the building, which, as a result of the expansion, will be a non-residential building in the part used for the Applicant’s business activities.”


The current position of the tax authorities indicates the impossibility of depreciating premises and buildings that are included in the classification of fixed assets as residential, despite their actual use for business purposes – in the opinion of the tax authorities, the circumstance that determines the possibility of depreciation is their appropriate classification in the NIT.


Article 16c of the Corporate Income Tax Act;

Article 22c of the Personal Income Tax Act;

Decree of the Council of Ministers dated October 3, 2016 on the Classification of Fixed Assets;

Individual interpretation dated August 17, 2023, Ref: 0114-KDIP3-2.4011.559.2023.3.MG;

Individual interpretation dated February 10, 2023, Ref: 0115-KDIT3.4011.50.2023.1.JS;

Individual interpretation dated December 23, 2022, ref: 0113-KDIPT2-1.4011.888.2022.1.ID.