Taxation of cashback revenues?


Cashback is now a common service offered by banks. It consists in the fact that the financial institution reimburses its client a certain percentage of the expenses that were paid using the card. These types of internships are very popular and offered by many banks. Customers, including companies, show great interest in this type of products.

What is the taxation of cash-back income? Currently, it is quite complicated, as the tax authorities claim that it is taxable income in accordance with Art. 20 paragraph 1 of the PIT Act. Therefore, in order to enable their clients to settle their income in the annual tax return, banks should issue them with a PIT-8C declaration. However - as is commonly known - banks do not issue such declarations, explaining that this is the so-called bonus sale, which is tax-exempt, when its value does not exceed PLN 760 (Article 21 (1) (68) of the Act).

As a consequence of these inaccuracies, there is a situation where many entities, whether private persons or companies, do not show annual cash-back revenues in their declarations. This is mainly due to the lack of knowledge on the subject or, as already known, taxpayers have no idea how to prove such income without having the appropriate document.

The Ministry of Finance decided to counteract this state of affairs and in the draft amendment to the PIT Act (similarly to CIT) a new regulation was introduced - Art. 30 sec. 1 point 4b, which introduces taxation with a flat-rate 19% tax on benefits received by customers from the bank in connection with the maintenance of a bank account. With this solution to the problem, the bank will be the payer responsible for paying the tax on the cash-back revenues of its clients.

The new cash-back regulations would enter into force at the beginning of 2014. The main purpose of modifying the legal provisions in this area is to facilitate tax collection.