A developer running a sole proprietorship (JDG) incurs many expenses that can reduce tax, but only on the tax scale or the flat tax (podatek liniowy), and only where a link to the business can be shown. Instead of yet another long shopping list, we offer a map of the areas where costs appear most often, together with the pitfalls that are easiest to trip over in each of them.
Three rules to start with
The PIT Act says in broad terms that a cost is an expense incurred to generate revenue or to protect its source, except for the items listed in Article 23. This has three practical consequences:
- A ryczałt (lump-sum tax on recorded revenue) taxpayer does not deduct costs. Under ryczałt, tax is calculated on revenue, so the map below is mainly for the tax scale and the flat tax. An active VAT taxpayer under ryczałt can, however, deduct VAT from purchase invoices.
- A cost is not a profit. An expense reduces tax by only a fraction of its value. Under the flat tax, PLN 1,000 of costs is PLN 190 less tax; the rest is still a real outlay.
- Documentation and justification. An invoice issued to the company and the ability to explain what the purchase was for matter more than the category of the expense.
A developer's cost map
| Area | Typical expenses | What to watch for |
|---|---|---|
| Digital tools | licences for development environments, cloud servers, hosting, domains, paid repositories, password managers, AI coding assistants | subscriptions from foreign suppliers are, for an active VAT taxpayer, imports of services that must be reported in JPK_V7 |
| Knowledge and development | online courses, conferences, certifications, specialist books, learning a foreign language needed for projects | training should relate to the current business, not a completely new profession |
| Workplace | a desk in a shared office, office rent, a share of flat costs when working from home, chair and desk | when working from home, only the portion of charges matching the floor area or usage is a cost |
| Equipment | laptop, monitors, test devices, accessories | above PLN 10,000 depreciation is required; for private use, only part of the expense counts |
| Communications | phone subscription, internet, backup mobile line | a home line used by the whole family is best split proportionally |
| Business services | accounting office, charges on the business account, lawyer for a client contract, qualified e-signature | usually safe, provided the invoice relates to the business |
| Travel | tickets to client meetings, trips to conferences, accommodation, per diems on a business trip | a passenger car has its own limits, and the trip must have a business purpose (event programme, correspondence with the client) |
| Marketing | portfolio website, online advertising, paid listings on job marketplaces, business cards | spending in the nature of hospitality (for example, dinner with a client) is not a cost |
| Insurance | professional liability (OC), equipment insurance, a policy required by the client | personal insurance (for example life) is usually not a business cost |
| Financing | operating lease instalments, interest on a business-purpose loan, bank fees | repayment of loan principal is not a cost; the interest is |
Spending that often slips through
Experience shows that developers remember the laptop but miss small, recurring charges. It is worth reviewing the card statement once a quarter and checking:
- Subscriptions in foreign currency: cloud, project-management tools, plugins, paid APIs. Many providers issue invoices, but you have to download them yourself from the customer portal.
- Transaction charges: FX fees, payment-platform fees, exchange-rate differences on euro or dollar payments.
- Security-related services: hardware keys, backup services, a VPN required by the client.
- Costs tied to client requirements: additional audits, security certifications, document translations.
- Small consumables: cables, adapters, batteries, paper and toner.
What will not be a cost, even if it relates to the business
Article 23 of the PIT Act excludes a few items from costs that developers ask about most often:
- hospitality, including catering, food and drink bought to build the firm's image with a client;
- the value of the entrepreneur's own work, that of their spouse and minor children, so you cannot "employ yourself";
- income tax and fines or financial penalties with interest (for example a parking fine on the way to a client);
- donations (although some can be deducted from income under separate rules);
- the health contribution is in principle not a cost; the exception is the flat tax, where the contribution can be booked as a cost or deducted from income up to a limit of PLN 14,100 in 2026.
By contrast, ZUS (Social Insurance Institution) social contributions can be booked as a cost or deducted from income. We write more about contributions and start-up reliefs in our article on ZUS in Poland.
A sensible approach to costs: an example
A developer under the flat tax, an active VAT payer, has around PLN 15,000 net of annual expenses: tool subscriptions (PLN 4,000), a foreign conference with flight and accommodation (PLN 5,000), a shared-office desk (PLN 4,800) and small equipment (PLN 1,200). Costs lower her tax by around PLN 2,850 (19% of PLN 15,000) and, on top of that, reduce the health-contribution base. If, however, she bought a second car "for the business" solely to reduce tax, she would save at most a small percentage of its price, with a high risk of the expense being challenged.
A good practice is to keep a short note next to any unusual purchase: which project, which client, what use. During an inspection a few years later, that note is often more valuable than the invoice itself. A comparison of taxation forms, where costs are decisive, is in our article on the flat tax.
How Good Balance can help
As part of our simplified bookkeeping for JDG we review cost documents, settle the import of services from foreign software vendors and point out which expenses are worth documenting more carefully. We also help assess whether, given your cost pattern, the flat tax, the tax scale or ryczałt is the better fit.