An entrance ticket to an event can be recognised as an expense

Such a qualification was confirmed, inter alia, by the Director of the National Fiscal Information in interpretation no. 0113-KDIPT2-1.4011.423.2023.2.AP.

The case analysed by the Director of the National Fiscal Information was that of a model who, in order to obtain orders, has to travel frequently and participate in various events. The interpretation emphasised that since the purpose of the taxpayer’s expenditures on the purchase of tickets (airline, train, bus), purchase of accommodation services (hotel stay, flats, etc.), admission/entry tickets to various events/places/spaces is to be able to properly prepare for participation in photo shoots or films, and these expenditures are necessary for the conducted business activity, it should be deemed that they are expenditures that may be classified as tax deductible costs. It is only important that these expenses are reasonably justified by the size of the business and are not purely personal in nature, and should be properly documented.

– In the quoted interpretation, we had an example of services provided by a model. However, the principles and conclusions from this position of the tax authorities may also apply more broadly, to other industries, other taxpayers and the services they provide. One only needs to remember a few rules regarding the recognition of expenses as costs. First, the expense must be incurred by the taxpayer, i.e. it must ultimately be paid from the taxpayer’s property resources. Secondly, the expense is incurred in order to obtain, preserve or secure a source of revenue. Thirdly, the expense incurred is in connection with the taxpayer’s business activity. Fourthly, it is definite (actual), i.e. the value of the incurred expense has not been returned to the taxpayer in any way. Fifthly, the expense has been properly documented. And another condition – the expense in question must not be included in the catalogue of those which the Act explicitly excludes from tax costs (and therefore cannot be included in costs). It is also important that it should not be of a personal nature – for example, in the interpretation 0115-KDIT3.4011.364.2023.1.KP – the director of the KIS refused to include expenses for a dentist as tax deductible costs, despite the fact that the Applicant, due to her business activity (vocal courses and playing concerts as a soloist), indicated that the perfect state of her teeth was essential for her business. The authority found that these were expenses of a personal nature, improving health conditions and not the performance of the business – explains Marta Chacińska, Project Manager at Thedy & Partners.