Poland: tax incentives to encourage business development and promotion
In Poland, an ambitious legal reform was published on October 29 under the auspices of the Polish government, known as "Polish", which entered into force on January 1, 2022.
Among other things, this legislative reform has introduced important incentives for economic activity. However, on some points the new fiscal and social measures have not been without controversy due to gaps, contradictions and dysfunctions experienced in interpretation and implementation.
The law of October 29, 2021 which amends not only the law on personal income tax (PIT), but also the law on corporate tax (CIT) as well as several others, provides, among other measures, a tax credit for companies or self-employed workers wishing to develop their business towards new markets for their products.
In particular, the tax reform (which introduces art. 18eb, paragraph 7, of the CIT law and art. 26gb, paragraph 7, of the PIT law) allows taxpayers to "double" the deduction on the taxable basis of the following expenses :
Participation in trade fairs, including stand organization, purchase of airline tickets (other means of transport are not included), food and accommodation for employees and the taxable person.
Advertising actions, such as the purchase of advertising space, the preparation of the website, publication of brochures and catalogs of the products offered.
Adaptation of product packaging to customer needs.
Management of official documentation for the sale of products, including product certifications or trademark registrations.
Management of documentation for participation in public tenders.
Obviously, doubts have already emerged regarding the double deductibility of certain categories of expenses. For example, as regards the costs related to the adaptation of packaging, the Polish Ministry of Finance has made it clear that these are only costs incurred in the adaptation phase itself and not production overheads.
On the other hand, the Polish Ministry confirmed that the cost of broadcasting radio and television advertising falls within the category of advertising actions, the double deductibility of which is permitted.
In any case, the new measures on the deductibility of these expenses set a total ceiling per taxpayer and year to be able to apply this deduction, which amounts to 1,000,000 PLN (approx. 220,000 €).
Finally, only product manufacturers and not service providers can benefit from these bonuses.
Finally, it should be noted that the bonus is conditional on the growth in sales in the following two years (including that of enjoyment); otherwise, it must be reimbursed to the tax authorities.
Miquel Bordas Prózynski
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