Polish administrative courts accept 50% deductible cost rate for employees

Which conditions should be fulfillment to accept 50% costs rate for employees?

In last years, tax authorities used to acept the application of higher deductible costs in 50% rate by employees carrying creative works (on the basis of article 22 paragraph 9 point 3 of Personal Income Tax Act). The employee’s remuneration for transferring the copyrights to created works used to be determined on the grounds of percentage rate of time spent on creative projects / works versus other duties.

Lately, tax authorities have issued a number of individual interpretations of tax law, which indicate that simple keeping the records of work time does not state the sufficient evidence , needed for applying higher deductible cost rate for creative employees. Tax authorities more and more frequently carry controls on settlements of employees who have been deducting the costs at the rate of 50%. Most frequently it concerns programmers, architects of systems and software, specialists of quality / testers and other representants of IT professions who are responsible for creating programs, applications, games or software. Documentation collected by taxpayers is more frequently questioned – registers of creations, registers of time spent on creative work or separate registers of worktime effects. Moreover, according to tax authorities, it is not sufficient to determine the remuneration for creations as percentage of total remuneration.

Do you want to learn more? Read the brochure about tax deductible costs prepared by Advicero Nexia.