Gym expenses included in company costs along with pool and karate fees

In some situations, an entrepreneur may include gym expenses as tax deductible expenses. The same applies to swimming pool fees or martial arts fees. However, it all depends on the specifics of the conducted business activity and proving that the incurred expenditure was not of a personal nature, but was related to the conducted activity. Read our article and find out when expenses of this type can be included in the company's costs.

What expenses can be counted as tax deductible costs?

Running a business involves various types of expenses. When including them as tax deductible costs, the entrepreneur must remember that the tax base can only be reduced by those that are actually related to the business and meet the conditions listed in Art. 22 sec. 1 of the Personal Income Tax Act.

Pursuant to the aforementioned provision, tax costs may include expenses incurred in order to generate revenues or to preserve or secure their source, with the exception of those listed in Art. 23 of the PIT Act. Moreover, it is important that they are properly documented.

Can I put my gym expenses in my deductible expenses along with my swimming pool and martial arts fees?

According to an individual interpretation, the Director of the Tax Chamber in Warsaw of March 10, 2010 (reference number IPPB1 / 415-17 / 10-2 / AM) “(...) tax deductible costs are costs incurred in order to achieve income or to maintain or secure a source of income, with the exception of the costs listed in Art. 23. (...) the term "in order to" should be understood as striving to achieve a certain state of affairs (income), and the taxpayer's striving has the attribute of "purposefulness" if, on the basis of the available knowledge about cause-and-effect relationships, it can be reasonably considered that the cost may bring the expected succession (income).

Therefore, the possibility of qualifying a specific expense as a tax deductible cost depends on a reliable and comprehensive assessment of whether, in the light of all the circumstances in the case at the time of making the expense, it will be reflected in revenues. The duty of the taxpayer, as having an obvious benefit from the fact of including certain expenses as tax deductible costs, is to demonstrate the relationship between the incurring cost and obtaining income, in accordance with the provision of the provision expressed in Art. 22 sec. 1 of the above-mentioned act ”.

Summing up, the answer to the question whether expenses for the gym, swimming pool or martial arts may constitute a tax deductible cost is not clear. The possibility of qualifying this type of expenses as tax deductible costs depends on what exactly the entrepreneur does. In this case, it is important to determine whether the expenses for the gym or swimming pool were incurred for purposes related to obtaining income or whether they bear the characteristics of a private expenditure.

According to the above interpretation of the Director of the Tax Chamber in Warsaw, in a situation where the entrepreneur conducts a licensed business activity consisting in the protection of persons in accordance with the Act of August 22, 1997 on the protection of persons and property, expenditure on the gym, swimming pool or martial arts may be considered as cost of getting income. In the above-mentioned individual interpretation, we read that the specificity of this type of activity "allows for the recognition of expenditure on swimming pools, gyms and martial arts aimed at maintaining good physical condition (...) to the costs of economic activity".

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Recognition of expenses for a gym or martial arts training as tax deductible costs will also be justified if the entrepreneur is a lifeguard or security guard, but also if he acts as a personal trainer or fitness instructor. In these professions, the entrepreneur is even obliged to maintain physical fitness and take care of the physical condition in a special way, therefore, in this case, pass the above-mentioned expenditure should not raise any doubts of the tax authorities.

The situation is different in the case of activities not related to the need to maintain physical fitness. In this case, expenses for the gym or swimming pool will be considered private expenses due to the lack of connection with the achieved income, and therefore cannot constitute tax deductible expenses.