Fiscal restricts expansion relief

Recall that the expansion relief was introduced in 2022 to the PIT and CIT Acts and consists in the possibility of an additional deduction from the tax base of expenses that the entrepreneur has incurred in order to increase income from the sale of its products. The law specifies what expenses can be deducted under the relief. These may include, for example, expenses for participation in fairs and exhibitions. Consequently, the entrepreneur may deduct 200% of the expenses incurred: 100% as a deductible expense and 100% under the relief. The maximum deduction under the relief cannot exceed PLN 1 million in a given year.

– Due to the fact that the provisions concerning the expansion relief are quite imprecise, entrepreneurs attempt to clarify the eligibility of this relief in their requests for interpretations. In the interpretations issued, the Director of the KIS very much limits this relief. For example, according to the KIS Director, fruit and vegetable processors cannot benefit from the deduction. This is because processors only process fruit and vegetables, they do not grow fruit and vegetables, so they do not produce them. Another restriction concerned animal breeders. The company not only breeds, but also reproduces animals by insemination or in vitro. The director of the KIS considered that there was no question of manufacturing and thus the possibility of taking advantage of the relief, because this relief, according to the authority, is addressed only to entrepreneurs who are manufacturers. In a subsequent interpretation, the authority limited the right to deduct fuel expenses used to travel to the trade fair. It allowed the deduction of fuel for transporting equipment to the event, but not for transporting employees. However, it did not explain how to calculate what part of the fuel relates to transporting the equipment and what part relates to transporting the employee – Patrycja Krzymińska of Thedy & Partners points out.

It is worth adding that, in the meantime, a draft clarification of the Ministry of Finance appeared concerning the relief for expansion. Also in it, the MF limited, for example, the possibility of taking advantage of the relief for manufacturers of electronic equipment, if the product feeding the offer of this manufacturer was created only as a result of assembling externally supplied components. Similarly, if the production takes place outside the taxpayer’s plant, the relief will also not be available. Employees’ salaries cannot be accounted for under the relief, but airline tickets for employees, for example, can.

– Once again, we have a relief that was supposed to be a support for entrepreneurs, but due to the imprecision of regulations and interpretation of authorities, entrepreneurs will not really want to use it, adds Patrycja Krzymińska.