Entrepreneur's life policy and costs


As you know, the costs of the entrepreneur can include all kinds of expenses that meet the requirements of art. 22 sec. 1 of the act on tax on natural persons, which says that tax deductible costs are costs incurred in order to achieve revenues or to maintain or secure the source of revenues, with the exception of the costs listed in art. 23.

In order to be included in costs, an expense must have a cause-and-effect relationship between the income earned and the cost incurred and cannot be listed in the catalog of non-tax deductible costs specified in Art. 23 of the PIT Act.

According to tax interpretations, an entrepreneur cannot classify this expense as company costs, as it is a typically personal expense. This position is confirmed by the individual interpretation ILPB1 / 415-699 / 10-5 / KŁ of September 10, 2010 of the Director of the Tax Chamber in Poznań: “(...) nature of personal expenses. Thus, the above-mentioned expenses are not directly related to the conducted business activity and are not expenses incurred in order to create or increase income and to secure or maintain the source of income. Lack of the above-mentioned the cause-and-effect relationship excludes the possibility of passing the above-mentioned expenses to tax-deductible costs of business activity (...) ”.