Include employee training in company costs

Employers more and more often decide to train and take courses for their employees. Such activities are aimed at improving the professional qualifications of subordinates and have a motivating function. Check whether the training for the employee, the entrepreneur can include in the company's costs.

Training for an employee in company costs

The entrepreneur has the right to include the expenses incurred on training for the employee as tax deductible costs, however, it should be remembered that the training should be closely related to the scope of the employee's duties in the company. This means that, for example, an accountant takes a tax or accounting course. Doubts would arise, for example, for a forklift operator training course. In this situation, it would be difficult for the employer to prove that the paid training was related to earning income or was aimed at securing their sources.

Doubts also arise in a situation where, along with the cost of training, the entrepreneur incurs expenses for hotel and catering services or renting a conference room.

The costs incurred for employee training should meet the basic condition set out in Art. 22 (1) of the Personal Income Tax Act (hereinafter: the PIT Act) and Art. 15 sec. 1 of the Corporate Income Tax Act (hereinafter: the CIT Act), i.e. the expense may constitute tax deductible costs if it was incurred in order to obtain income or to secure or maintain the source of income. Therefore, the purpose of the training should be related to the prospect of earning income.

Adequate documentation

The costs of employee training will certainly arouse the interest of the tax authorities, if along with them there were expenses for gastronomy or the entertainment part. In such a situation, it should be expected that the tax authorities will examine in detail the relationship between the training and the conducted activity, as well as whether the purpose of raising qualifications was not really only to provide entertainment and gastronomy. These types of benefits should be considered personal and, therefore, excluded from tax deductible costs.

The entrepreneur should have all documents that will prove that the expenses incurred are closely related to the training, and thus, meet the conditions listed in Art. 22 sec. 1 of the PIT Act.

It is important that the trainings on which the entrepreneur spends money should be related to the conducted activity, but also translate into improvement of work efficiency or its better organization.

Gastronomy in costs

The entrepreneur may also include expenses on catering directly related to the training as tax deductible costs. The meal during the training is usually an integral part of it, in order to ensure the appropriate level of the service provided.

If the employer organizes a meal not related to the training, e.g. after its completion, then such an expense cannot be considered a tax deductible cost. It should be recognized that it was intended to make the employees' time more enjoyable. Expenditure on gastronomy must result from the nature of the training.

The position of the director of the Tax Chamber in Bydgoszcz in the individual interpretation of February 27, 2013, ref. ITPB1 / 415-1260C / 12 / WM on the recognition of training for employees as tax deductible costs:

“(...) The above provision implies that tax deductible costs are all costs, and therefore directly and indirectly related to obtaining revenues, except for the costs listed in Art. 23 of the above-mentioned act. However, in order for a given expense to be classified as tax deductible costs, the taxpayer must demonstrate its connection with the business and the fact that the incurring of this expense had or could have had an impact on the amount of the income obtained, or on the preservation or securing of the source of this income. Tax costs are both costs that are directly related

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cause and effect with tax revenues, as well as indirect costs, which cannot be linked to a specific income, but for the proper functioning of the enterprise, incurring them is justified.

(...) The purposefulness of incurring this type of costs by an entrepreneur is justified by the imperative of facilitating employees to improve their professional qualifications resulting from the provisions of the labor law. However, the scope of knowledge that employees can acquire at the employer's expense under the above-mentioned obligation to raise qualifications is not unlimited. Expenses for improving employee qualifications - in order to constitute a tax deductible cost for the employer - must be closely related to the scope of the employee's duties resulting from the employment relationship and the nature of the employer's activity ”.