As a response to a cassation appeal, brought by the Director of National Tax Chamber, on 3rd February 2022, Supreme Administrative Court issued a ground-breaking judgement, regarding a possibility of retrospective adjustment of depreciation rates for the previous years. In this verdict, SAC dismissed the cassation appeal and recognised that the position presented by Voivodship Administrative Court in Warsaw dated 11 December 2018, is appropriate. This court, admitting the point to taxpayer, stated that discussed provision 16i par. 5 of CIT, according to which: “The rate shall be changed beginning with a month when these measures have been entered in the records or with a first month of each subsequent tax year”, does not introduce, in any way, direct prohibition of making adjustments of the depreciation rates for the past years. He also underlined, that if legislator’s intention was different, this provision would have been edited differently. SAC pointed, that the adjustment of the depreciation rates, concerning periods of settlement which have not yet expired, is possible. It results directly from literal wording of previously – mentioned provision. Taxpayer is therefore entitled to lower the depreciation rates for a given year, after the initiation. However, this change must be followed from the first month of every tax year. One more limit of being able to use this right is inadmissibility of exceeding the maximum depreciation rates, included in the List of Annual Depreciation Rates, attached to CIT Act.
According to the above, taxpayer is entitled to make this change at any time and it will induce results retrospectively. In doing so, legislator wanted to meet those taxpayers, who have suffered losses in the past or have been deprived of the opportunity to settle older losses in the light of insufficient income. In conclusion, according to SAC, taxpayer has the option to change his depreciation rates both on an ongoing bases or regarding to previous settlement periods.