Starting in 2022, taxpayers can take advantage of a new sponsorship deduction. It is aimed at entrepreneurs who engage in socially beneficial activities (CSR), through which they support sports, culture, higher education and science.
Who can use the sponsorship deduction?
Eligible for the sponsorship deduction in Poland are:
- PIT taxpayers with business activities taxed on a general basis according to the tax scale and flat tax,
- CIT taxpayers earning income other than income from capital gains.
What is the sponsorship deduction in Poland?
A taxpayer earning income other than income from capital gains may deduct from the tax base an additional amount representing 50% of deductible expenses incurred for:
1. SPORTS ACTIVITIES
This includes, among others:
- financing a sports scholarship by which is meant a unilateral, non-refundable cash payment, that is awarded by local government entities, the minister responsible for physical culture, public benefit organizations or sports clubs for achieving a specific sports result or enabling preparation for a sports event,
- financing of a sports club (for example – purchase of sports equipment, implementation of sports training programs, covering the costs of organizing sports competitions, covering the costs of using sports facilities for sports training, financing sports scholarships and salaries of training staff),
- financing of sports events that are not mass sports events, as referred to in art.3 point 3 of the Act of March 20, 2009 on security of sports events.
2. CULTURAL ACTIVITIES
Within the meaning of the Act of October 25, 1991 on the organization and conduct of cultural activities, such as:
- costs incurred for financing cultural institutions entered in the register kept pursuant to Article 14 (3) of the Act of October 25, 1991 on organizing and conducting cultural activities. The institution must be entered as of the date the expense was incurred, not the date the deduction was made,
- costs incurred to finance cultural activities carried out by art colleges and public art schools.
3. ACTIVITIES SUPPORTING HIGHER EDUCATION AND SCIENCE
Including, for example:
- payments for an employee’s post-graduate education, specialized education or education in other forms,
- salaries of students completing internships and apprenticeships provided for in the taxpayer’s program of study. Provided that they are incurred pursuant to an agreement between the taxpayer and the university,
- financing of dual studies, as referred to in Article 62 of the Act of July 20, 2018. – Law on Higher Education and Science, in a specific field of study. This includes the cost of internships – provided they are incurred under an agreement between the taxpayer and the university,
- remuneration paid in the period of 6 months from the date of employment by a taxpayer organizing apprenticeship for students of a given higher education institution to an employee who is a graduate of studies at this institution employed through an academic career office referred to in Article 2, paragraph 1, point 1 of the Act of April 20, 2004 on employment promotion and labor market institutions, operated by this institution. The condition is that the costs are incurred on the basis of a contract between the taxpayer and the university.
It should be kept in mind that the amount of the deduction cannot pexceed the amount of income earned by the taxpayer from income other than capital gains in a given tax year.
With this deduction, the taxpayer will be able to account for 150% of the costs incurred in income tax:
- 100% as a deductible income expense,
- 50% as a allowance under this deduction.
Method of accounting for the deduction in Poland
The taxpayer makes the allowance in the return for the tax year in which the expenses were incurred.
In addition, it shall submit information listing the deductible costs incurred.
This deduction is regulated in the provisions of Article 26ha of the PIT Act and Article 18ee of the CIT Act.
Author: Agnieszka Bojar, Manager of the Accounting area at MDDP Outsourcing.
Act of July 26, 1991 on Personal Income Tax.
Act of February 15, 1992 on Corporate Income Tax.
Act of July 20, 2018. – The Act on Higher Education and Science.
Act of April 20, 2004 on employment promotion and labor market institutions.
Act of March 20, 2009 on security of sports events.
Act of October 25, 1991 on the organization and conduct of cultural activitiesj.