The Polish Deal program introduces a new relief for entrepreneurs, the so-called sponsorship relief. – Companies that want to use it will be able to save up to PLN 100 million next year – Deputy Minister of Finance Jan Sarnowski told PAP.
The so-called the sponsorship relief was proposed by the government in the amendment to tax laws implementing the Polish Deal. These laws were adopted at the beginning of October by the Sejm, now the Senate is dealing with them.
Sarnowski told PAP that this relief is intended to encourage entrepreneurs to cooperate with cultural institutions, universities and sports clubs to help them obtain additional funds for their operations.
– The sponsorship relief is a support for corporate social responsibility. This is a standard in the countries of Western Europe and North America, while in Poland this type of support has never existed. Many entities operating in Poland engage in sponsorship activities, sign special advertising contracts, for example with sports clubs, organizers of cultural events, cultural institutions or universities. In Western Europe, it is difficult to find a university without a workshop equipped by a local entrepreneur, a lecture hall or a hall named after a famous graduate, who was still involved in the life of the university in which he started his scientific career. There are also not many schools that would not have signed a cooperation agreement with one of the companies from their business environment – explains Sarnowski.
As he emphasizes, the advantages of this solution are mutual, “because entrepreneurs can become more involved in the life of the community in which they operate, which in turn has a very good impact on the perception of the brand itself by consumers. They are also important for employees who engage in socially beneficial activities of the company. In this way, the image of the company is created as an attractive employer “.
Sponsoring expenses included in the companies’ tax deductible costs
– Like in Western Europe, we want to support the involvement of companies in the development of their environment, ecosystem and community in which they operate with tax tools. Hence our proposal, which was included in the Polish Deal package, in the assumptions announced in May. Later, specific provisions were included in the bill. The Council of Ministers approved them and passed them by the Sejm. This week, the Senate budget and public finance committee began to consider solutions from the Polish Deal package – including the sponsorship relief. Next week, the package will go to the plenary deliberations of the Senate – pointed out Sarnowski.
As the deputy minister explained, currently a company that engages in sponsorship activities signs an agreement with a sports club, event organizer or university. Expenses related to the implementation of this contract, primarily sponsorship expenses, are included in the companies’ tax deductible costs.
– Thanks to the tax relief, entrepreneurs will be able to additionally deduct 50 percent from the income tax base (PIT and CIT). costs incurred for sports, scientific and cultural activities. This means that the taxpayer, in addition to counting the expenses incurred, 100 percent. to tax deductible costs, will obtain additional income tax preference by deducting 50% from the tax base. costs incurred. In total, therefore, the entrepreneur will account for 150 percent of the income tax. cost incurred. That is, for every zloty that the entrepreneur spends on sponsoring activities, he will deduct PLN 1.50 from the tax base – explains Sarnowski.
He added that the tax relief will be deducted up to the amount of business income obtained in the tax year.
– In practice, assuming that the entrepreneur has spent 20,000 PLN for sponsoring activities, this will include 100% of the tax deductible costs. of this and another 50 percent. deducted as part of the relief, i.e. a total of 30,000 zloty. The effect is that the tax will benefit purely about 2,000. PLN – he explained.
Sponsoring market in Poland
The deputy head of the Ministry of Finance emphasized that the sponsorship market in Poland is developing rapidly. – Last year only sports sponsorship – according to various estimates, it was about PLN 800 million to PLN 1 billion spent by companies on supporting the activities of sports clubs or on scholarships for individual athletes. We estimate that as a result of applying the tax relief, companies will save about PLN 100 million next year, he said.
When asked to whom this relief is addressed, he explained that it applies to all entrepreneurs operating in Poland. – So both sole proprietorships and companies – he said.
Sarnowski explained that the sponsorship relief could be settled in the annual settlement for 2022, i.e. for the first year of its operation. “This means that the expenses incurred in 2022, i.e. from January 1 next year – will be able to be included in 150% of the costs. And this is settled in the first months of 2023 with the settlement of the year 2022.” – He said.
The deputy minister pointed out that the need to introduce a sponsorship allowance was reported by the entrepreneurs themselves during talks and meetings with representatives of the Ministry of Finance.
Relief for sports activities – rules
In accordance with the adopted amendment, in the case of a tax relief for sports activities, the deduction will be made of the costs incurred for sports clubs, i.e. intended for the purchase of sports equipment, costs of organizing or participating in sports competitions, as well as the costs of using sports facilities for the purposes of sports training. Costs may also apply to financing a sports scholarship.
In the case of relief for cultural activities, deduction will be made of the costs incurred for cultural activities within the meaning of the Act on the organization and conduct of cultural activities. Within the meaning of this Act, cultural activity consists in the creation, dissemination and protection of culture.
In the case of support for science and higher education, deduction will be made, for example, of costs incurred for scholarships, funding of education or salaries for employed students and graduates.
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