There are tax reliefs designed to encourage entrepreneurs to engage in socially beneficial activities (CSR). One such mechanism is the sponsorship relief, which allows PIT and CIT taxpayers to deduct an additional 50% of tax-deductible costs related to supporting sports, cultural activities, higher education, and science.
What is the sponsorship relief?
The sponsorship relief allows entrepreneurs to obtain additional tax benefits resulting from financing CSR activities. The taxpayer may include 100% of the costs incurred as tax-deductible expenses, and additionally deduct 50% of the same costs again from the tax base.
In practice, this means that an entrepreneur who, for example, finances the organization of an artistic event in exchange for advertising services and incurs a cost of 20,000 PLN, will be able to include the entire amount as tax-deductible expenses and additionally deduct 10,000 PLN from the tax base.
What costs does the sponsorship relief cover?
Costs eligible for deduction under the sponsorship relief include:
- purchase of sports equipment,
- financing sports or academic scholarships,
- organization of sports and artistic events (excluding mass events),
- support for cultural institutions.
How to settle the sponsorship relief?
The sponsorship relief is deductible up to the amount of income earned in the tax year from non-agricultural business activity (PIT) or from non-capital income (CIT). Please note that only costs that have not been reimbursed to the taxpayer in any other way are eligible for deduction.
The deduction is made in the annual tax return for the tax year in which the CSR expenses were incurred. An entrepreneur using the relief must present a list of CSR costs incurred in accordance with the established template.
