Newly, tax depreciation for solarsolar power plants will be applied in a “standard” manner, i.e., the ‎taxpayer will classify the individual parts of the solar power plant into the appropriate depreciation ‎group and choose either the straight-line or accelerated depreciation method, with the possibility of ‎interrupting the depreciation (exceptions, such as for taxpayers who are recipients of investment ‎incentives, naturally still apply).‎

In connection with the abolition of § 30b of the Income Taxes Act and the application of the general ‎rules contained in the Income Taxes Act for the depreciation of solar power plants, which are linked ‎to other regulations, e.g., the Building Act, the Civil Code, the CZSO classification, certain ‎uncertainties arise in practice regarding the breakdown of a solar power plant into its technological ‎and construction parts and their classification into the appropriate depreciation groups.‎

The current approach tends towards classifying the technological part of a solar power plant ‎according to the nature of the individual assets (solar panels, switchboards, rectifiers, inverters, etc.) ‎in the second or third depreciation group with a depreciation period of 5 or 10 years. The construction ‎part of the solar power plant, which will constitute a separate constructure, will be classified in the ‎fourth depreciation group and will therefore be depreciated over a period of 20 years. This applies, for ‎example, to solar power plants that are built separately in open areas. However, if the construction ‎part represents a technical improvement to an existing building (for example, a solar power plant on ‎the roof of an existing building), it will be depreciated depending on the depreciation period of that ‎building, i.e., 20, 30, or 50 years. A temporary structure will be an exception and will be depreciated ‎using the straight-line method over its duration limited by the building authority.‎

Given that many questions arise in this area, methodological information is expected from the tax ‎administration, which should include a proposal on how to resolve these situations and possibly ‎confirm the procedure described above.‎

The abolition of § 30b of the Income Taxes Act essentially returns the depreciation of solar power ‎plants to the legal status that applied to this asset before its introduction, i.e., before January 1, ‎‎2011. The addition of § 30b to the Income Taxes Act was justified at the time of its adoption by the ‎need to eliminate the indirect support for electricity generation from ecological sources, especially ‎solar installations, which was understood as unjustified and therefore the tax regime for these ‎sources was tighten. One of these measures was the extension of the depreciation period and the ‎introduction of the obligation to apply tax depreciation for defined tangible assets used for electricity ‎production from solar radiation -technological parts (i.e., the impossibility of interrupting tax ‎depreciation).‎

According to the amending proposal that proposed this new regulation, the reason for the abolition ‎of this paragraph is primarily to support the development of renewable energy sources, within which ‎the existing specially established method of depreciating solar power plants appears unsystematic ‎and discriminatory. According to the proposers, the excessively long depreciation period and the ‎inability to choose an accelerated depreciation regime currently result in solar power plant ‎operators being unjustifiably disadvantaged compared to entrepreneurs in other sectors of the ‎economy, including operators of other electricity sources.‎

The new depreciation rules will be effective from August 1, 2025, and will be applied to all assets for ‎which depreciation begins from this date. According to the transitional provisions for tangible assets ‎used for electricity production from solar radiation listed in the abolished § 30b of the Income Taxes ‎Act, for which straight-line depreciation (over 240 months) has already begun, this depreciation ‎method will continue until the disposal of the asset. An exception is assets for which depreciation ‎began between July 1, 2024, and July 31, 2025. For these assets, the taxpayer can choose whether to ‎use the straight-line depreciation according to the abolished § 30b of the Income Taxes Act, or ‎whether to depreciate them using the newly introduced standard method, either straight-line or ‎accelerated, depending on their classification in the appropriate depreciation group.‎