Can personal equipment be written off as expenses? Now, it can!

Shopping for business purposes or personal use?

When acquiring goods or services you are obliged to determine its purpose, i.e. whether you buy it for the purposes of your business activity or for your personal needs. The purpose determines what document needs to be prepared to document the sale.

Principles for documenting the sale

• Purchase for business purposes – the transaction is documented with an invoice.
• Purchase for personal purposes – the transaction is documented with a receipt.

Issuing a personal invoice is a suggested solution. Such document is needed when assets acquired privately are used for the purpose of business activities.

Entrepreneurs have the right to incorporate assets previously acquired for private purposes into company assets. Therefore, cameras, laptops and cars etc. can be written off as expenses.

In other words, it means that entrepreneurs can enter them as tangible assets in the overall company’s assets.

What are tangible assets?

Tangible assets are elements of property such as:

> structures, buildings and premises in separate ownership

> machinery, equipment and means of transport

> other items which:

1. were acquired by a tax payer,
2. are used by a tax payer for purposes related to their business activity.
3. they are owned or co-owned by a tax payer,
4. they are complete and fit for use on the date on which they are taken over for use,
5. have an expected exploitation lasting more than one year.

A private property element that meets all the indicated requirements can be entered in the assets of the company. In addition, expenses incurred for its purchase can be written off as expenses.

New appraisal principles for 2022

If you intend to enter an asset into the records of tangible and intangible assets, you must first properly appraise it.

The law indicates that the appraisal should match the price of the purchase and not be higher than the market value. However, the procedure is not required to be performed by an appraiser. The appraisal itself should be documented by collecting evidence in the form of screenshots taken from online services such as Allegro, Olx, Otomoto.

IMPORTANT NOTE! For evidentiary purposes, documentation should be collected in order to confirm that the appraisal is consistent with market prices and takes into account the subject of appraisal, its condition and degree of wear.

Legal basis:
– Article 22g (1)(1) of the Personal Income Tax Act of 26.07.1991 (Journal of Laws of 2021, item 1128, as amended.).