Christmas gifts and taxes
During the pre-Christmas period, entrepreneurs eagerly give gifts to contractors and employees. However, as fillup.pl and e-pity.pl tax advisor Monika Piątkowska reminds us, not every gift can be given without tax consequences. Awareness of the applicable rules helps entrepreneurs avoid surprises from the tax office.
Many entrepreneurs do not realize up to what value they can give a gift to contractorsto avoid additional tax burdens. – The Tax Office is not the Easter Bunny and we must add appropriate tax to the value of certain gifts – warns Monika Piątkowska.
A gift worth up to PLN 200 tax free
As the expert explains, it can be transferred to the contractor without income tax a gift worth up to PLN 200provided that the recipient does not have an employment relationship or a civil law contract with the company. – If we give the contractor a gift worth more than PLN 200, the recipient must pay income tax on the value of the gift – says Piątkowska.
Important
It’s worth remembering that this limit does not apply to gifts given to employees. In their case, the entire value of the gift is subject to tax.
Christmas gifts and VAT limits
Additional complications arise in the case of VAT, where different amount limits apply. The VAT exemption covers gifts whose total value for one person in a year does not exceed PLN 100 net – then it is necessary to enter them in a special register. In turn, for gifts up to PLN 20 net, registration is not required. – If we do not meet the exemption conditions, we should add the tax due to the value of the gifts – explains the expert.
A Christmas gift at the expense of the company?
Entrepreneurs also have doubts about whether Christmas gifts can be included in tax-deductible costs. The problem results from the imprecise concept of “representation costs”. – The Act does not clearly define what is meant by representation. However, it is assumed that these are expenses incurred to create a positive image of the company – explains Monika Piątkowska from fillup.pl and e-pity.pl.
Advertising expenses are treated differently – if their purpose is to promote a company, they may constitute a tax expense. – Gifts of low value bearing the company logo will not be representative and may be considered a tax-deductible expense – adds the expert.
Source: fillup.pl
