On 13 June 2025, the General Financial Directorate issued methodological information containing recommendations on how to proceed with the depreciation of a photovoltaic power plant. Changes in this area were brought about by an amendment to the Energy Act, which abolished the existing method of depreciation of photovoltaic power plants. You can read about the new rules and how to approach them according to the tax administration in our article.
We have already addressed the issue of depreciation of photovoltaic power plants on our blog in our April article, where we drew attention to the abolition of the special method of depreciation of photovoltaic power plants regulated by Section 30b of the Income Tax Act and the application of general rules for their depreciation. At the same time, we pointed out that in connection with this change, the tax administration is expected to issue methodological information, which was to include the procedure for proceeding with the depreciation of the photovoltaic power plant after this change.
The announced information of the GFD was issued on 13 June 2025 and divided photovoltaic power plants (hereinafter referred to as “FTVE”) into three categories in terms of depreciation:
• Photovoltaic power plant as part of the construction
This is a situation where a photovoltaic power plant is a source of electricity for a specific building (house) according to construction regulations. In this case, the photovoltaic power plant as a whole (i.e. the construction and technological parts) will be depreciated as part of this building within the meaning of +++++) of Annex No. 1 to the Income Tax Act. In practice, the depreciation group of the building of which the power plant will be a part will be decisive for the length of the depreciation period of the photovoltaic power plant – usually 30 years if it is a production building, or 50 years if it is an office building, for example.
• Photovoltaic power plant as a production plant
This category includes photovoltaic power plants, which are considered to be special-purpose facilities used for the operation of services (outputs) that do not form a single functional unit with the building or structure, even if they are firmly connected to it, and are therefore depreciated separately. Such an assessment is possible if the photovoltaic power plant is not a source of electricity for a specific building (object). Under these circumstances, the basic principle of assessing a photovoltaic power plant for tax purposes will apply, consisting in the separation of the construction and technological parts of the power plant construction and their separate depreciation within the meaning of Section 26 para. 2 of the ITA. In this case, its technological part is considered to be separate tangible movables for the purposes of the ITA, which will usually be classified in the 2nd or 3rd depreciation group.
• Photovoltaic power plant as a temporary construction
If the authority limits the duration or lifetime of the FTVE construction in advance in accordance with the Construction Act, then this “temporary” applies to the FTVE construction as a whole, i.e. also to its technological part, with the depreciation being determined under the Income Tax Act as the ratio of the input price of the property to the specified duration.
Finally, we would like to add that the information also deals with the interpretation of the related transitional provisions and the specific procedure for items of tangible assets for which (time) depreciation has been commenced between 1 July 2024 and 31 July 2025.
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