The tax depreciation of photovoltaic power plants (PV plants) in the Czech Republic changed significantly on 1 August 2025. Instead of being subject to the special regime regulating the depreciation of equipment for the production of electricity from solar radiation (section 30b of the Income Tax Act (ITA)), PV plants are now classified and depreciated in accordance with the general rules governing the depreciation of tangible assets. This change creates flexibility for investors, but also introduces challenges in terms of correct classification and tax optimisation.
Section 30b required that the technological part of PV plants—regardless of their actual composition—be depreciated on a straight-line basis over a 20-year period. (The technological part of a PV plant includes photovoltaic panels, inverters, converters, cabling, meters, switchboards and other equipment directly related to the production and distribution of electricity.) The new regime allows a plant to be separated into individual components, with each component classified in the appropriate depreciation group according to the CZ-CPA and CZ-CC classifications (see below).
The building elements of a PV plant (e.g. load-bearing structures, foundations, fencing, connections fixed to the ground) are classified according to the CZ-CC classification (Classification of Construction Work). These elements will be depreciated as separate buildings, based on the nature and use of the building. It will be important to correctly identify whether the building is a separate building or merely a structural alteration to another building.
Technological components are classified according to the CZ-CPA (Classification of Production) and depreciated as separate movable assets, typically in a depreciation group that allows for significantly faster tax depreciation compared to the 20-year regime. Battery systems used for energy storage are classified separately.
If a PV plant is an integral part of another building and exclusively serves its operation (e.g., a PV plant installed on the roof of an office building for its own consumption), this technology will be depreciated as part of the building, i.e., according to its depreciation group. This can lead to a significant slowdown in tax depreciation.
PV plants constructed as temporary structures (e.g., mobile PV systems, temporary energy solutions) will be depreciated according to the useful life determined by the building authority. The technology will also be classified separately and depreciated as movable property.
The repeal of ITA section 30b represents a step towards unification of the tax treatment of tangible assets and greater flexibility in the application of tax depreciation but it places more demands on the correct accounting and tax classification of the various components of a plant. Incorrect differentiation between the construction and technology parts may lead to the incorrect application of depreciation, a risk of overcharges or possible disputes with the tax administration. In practice, the new rules require greater emphasis on methodical preparation, consistent recordkeeping and interdisciplinary cooperation between technical, accounting and tax teams.
Affected businesses should consider taking the following steps:
Lucie Pečenková
BDO in Czech Republic
Section 30b required that the technological part of PV plants—regardless of their actual composition—be depreciated on a straight-line basis over a 20-year period. (The technological part of a PV plant includes photovoltaic panels, inverters, converters, cabling, meters, switchboards and other equipment directly related to the production and distribution of electricity.) The new regime allows a plant to be separated into individual components, with each component classified in the appropriate depreciation group according to the CZ-CPA and CZ-CC classifications (see below).
The building elements of a PV plant (e.g. load-bearing structures, foundations, fencing, connections fixed to the ground) are classified according to the CZ-CC classification (Classification of Construction Work). These elements will be depreciated as separate buildings, based on the nature and use of the building. It will be important to correctly identify whether the building is a separate building or merely a structural alteration to another building.
Technological components are classified according to the CZ-CPA (Classification of Production) and depreciated as separate movable assets, typically in a depreciation group that allows for significantly faster tax depreciation compared to the 20-year regime. Battery systems used for energy storage are classified separately.
PV Power Plants as Part of a Building
If a PV plant is an integral part of another building and exclusively serves its operation (e.g., a PV plant installed on the roof of an office building for its own consumption), this technology will be depreciated as part of the building, i.e., according to its depreciation group. This can lead to a significant slowdown in tax depreciation.PV plants constructed as temporary structures (e.g., mobile PV systems, temporary energy solutions) will be depreciated according to the useful life determined by the building authority. The technology will also be classified separately and depreciated as movable property.
Transitional Provisions
Taxpayers that put assets into use before 1 August 2025 and applied the provisions of ITA section 30b may continue to depreciate under this regime. For assets acquired during the period 1 July 2024 to 31 July 2025, taxpayers can elect to use section 30b or the transition rule. This choice will be crucial for the investor's tax strategy and, in many cases, it may be more advantageous to choose the new regime due to the shorter depreciation period for the technological part.
BDO Insight
The repeal of ITA section 30b represents a step towards unification of the tax treatment of tangible assets and greater flexibility in the application of tax depreciation but it places more demands on the correct accounting and tax classification of the various components of a plant. Incorrect differentiation between the construction and technology parts may lead to the incorrect application of depreciation, a risk of overcharges or possible disputes with the tax administration. In practice, the new rules require greater emphasis on methodical preparation, consistent recordkeeping and interdisciplinary cooperation between technical, accounting and tax teams.Affected businesses should consider taking the following steps:
- Make a technical analysis of the assets, i.e., of the physical components and their function within the PV plant.
- Ensure consistency between accounting and tax records, including the link to valuation, classification and accrual of costs.
- Determine whether it is beneficial to elect to use the transition rule, as this choice may affect the return on investment.
- Set up an internal methodology and recordkeeping, including the basis for CZ-CPA and CZ-CC classification and links to project documentation.
Lucie Pečenková
BDO in Czech Republic