Easter packages for employees at KPiR
Holidays are a special time when entrepreneurs often decide to make a nice gesture towards their employees. Among the most common are gifts. How to correctly settle parcels for employees on the grounds of PIT and VAT? Can this type of expense be included in costs? We explain below.
Packages for employees - income tax
Cost for the employer
These types of expenses, as a rule, may constitute the tax cost of the entrepreneur. As a rule, as they will mostly meet the requirements of Art. 22 sec. 1 of the PIT Act, i.e. they will be incurred in order to achieve income or to maintain or secure the source of income (employee motivation). However, what is important, these expenses cannot assume the nature of statutory costs that are not tax deductible costs listed in Art. 23.
Expenses for the purchase of parcels for employees will not constitute a tax deductible cost if they are financed with funds from the Company Social Benefits Fund (Article 23 (1) (42) of the PIT Act).
Pursuant to Art. 23 sec. 1 point 23 of the PIT Act, the taxpayer may not include expenses for the purchase of alcohol in costs.
Invoices documenting the purchase of packages for employees, as a rule, should be shown in column 13 of the KPiR - other expenses.
Income for the employee
Whether the received package will constitute income for the employee depends on the source of the funds. In the case of financing holiday gifts (worth up to PLN 380) with funds from the Social Fund or from trade union funds, they will constitute the employee's income, but - what is important - tax-exempt, as provided for in Art. 21 sec. 1 point 67 of the PIT Act.
Art. 21 sec. 1 point 67
Income tax free is the value of the value received by the employee in connection with the financing of social activities referred to in the regulations on the company social benefits fund, benefits in kind and cash benefits received by him in this respect, financed entirely from the company's social benefits fund or funds. trade unions, in total up to the amount not exceeding PLN 380 in the tax year; tangible benefits are not vouchers, coupons and other signs entitling them to be exchanged for goods or services.
On the other hand, gifts financed from the company's current funds will constitute the employee's income subject to taxation pursuant to Art. 12 sec. 1 of the PIT Act.
Art. 12 sec. 1
Revenues from the service relationship, employment relationship, homework and a cooperative employment relationship are all kinds of cash payments and the monetary value of benefits in kind or their equivalents, regardless of the source of financing these payments and benefits, in particular: base salaries, remuneration for hours excess, various types of allowances, awards, equivalents for unused leave and all other amounts, regardless of whether their amount has been determined in advance, and in addition, cash benefits incurred for the employee, as well as the value of other unpaid benefits or partially paid benefits.
Packages for employees - VAT
According to Art. 7 sec. 2 of the Act on tax on goods and services, the supply of goods subject to VAT shall also mean the transfer of goods belonging to his enterprise free of charge by the taxpayer, in particular:
the transfer or consumption of goods for the personal purposes of the taxpayer or its employees, including former employees, partners, shareholders, shareholders, members of cooperatives and their household members, members of the governing bodies of legal persons, members of the association,
any other donation
- if the taxpayer was entitled, in whole or in part, to reduce the amount of tax due by the amount of input tax on the acquisition, import or production of these goods or their component parts.
So, if the entrepreneur has deducted VAT on gifts purchased for employees, he will be obliged to tax and report the VAT due in the VAT sales register.
The exception to the above rule are gifts of small value and samples, as underlined in Art. 7 sec. 3 of the VAT Act.
Gifts of little value
Gifts of small value are understood as goods handed over by the taxpayer to one person:
A sample is understood as an item of goods, identifiable as a sample, or a small quantity thereof, which allows for the assessment of the characteristics and properties of the goods in their final form, and their handing over (handing over) by the taxpayer:
To sum up, due to the fact that handing over Easter parcels to employees has specific tax consequences, the entrepreneur should obtain a confirmation of receiving the gift from him, e.g. by signing in the records, which is necessary for income tax and VAT settlements.