Warranty extension fee and tax deductible costs

When purchasing assets under operating lease, the question often arises - can the warranty extension fee be included in tax deductible costs? In order to provide an answer, it is necessary to take into account the intended use of this fixed asset - i.e. whether it will be used exclusively for corporate purposes. The moment of payment of this fee is also important when considering.

Tax deductible costs in law

According to the Act on personal income tax (Article 22 (1)), tax deductible costs are expenses incurred in order to obtain income or to secure or preserve its source. Expenditure listed in Art. 23 of the aforementioned legal act. When the leasing ends and the entrepreneur buys an asset to enter it in the fixed assets register in the company, then he can enter the related expenses into tax deductible costs. The warranty extension fee is such an expense. It is clearly related to the generated income and, moreover, is not included in the statutory exclusion catalog. It is an obvious matter - doubts arise when accounting for such an expense, which depends on the moment when it is incurred.

Fee for the extension of the guarantee in tax deductible costs

Since the warranty extension fee is not an expense directly related to the purchase transaction, it will not affect the initial value of the asset. Therefore, the extension of the guarantee should be considered as an indirect cost booked as other expenditure. However, since it most often concerns a period exceeding the tax year, it should be remembered about the possible need to settle it in proportion to the period for which the extension agreement was concluded. However, only those taxpayers who settle costs in the KPiR using the accrual method will be obliged to do so.