Expenditure on the interior of the company's headquarters and costs
Entrepreneurs, running a business, incur various types of expenses. Starting with the purchase of goods, ending with employee salaries. However, we cannot forget about the expenses related to the interior design of the seat, which should please the eye of not only the entrepreneur, but also employees and contractors. Can the expenses for the purchase of flowers, holiday decorations and other items be included in the costs? Let's check.
As a rule, the taxpayer may include in the costs those expenses that meet the requirements of Art. 22 sec. 1 of the Personal Income Tax Act: tax deductible costs are costs incurred in order to achieve income or to maintain or secure the source of income, with the exception of the costs listed in art. 23.
At this point, in general, there are no contraindications that the expenses related to the decor could be a cost. However, it is important to remember about Art. 23 sec. 1 clause 23, which says that the costs of representation, in particular those incurred for catering services, the purchase of food and beverages, including alcoholic beverages, are not included in the tax deductible costs.
Tax regulations do not define what is meant by "representation". The dictionary definition clearly indicated the splendor, above average, of evoking a positive impression. So if the expense is representative, it cannot be a tax deductible expense.
The letter of the Director of the Tax Chamber in Poznań, no. ILPB3 / 423-235 / 07-2 / MC, of February 13, 2008, allows to include this type in company costs:
"(...) Expenditure on the purchase of cut flowers, holiday decorations and occasional decorations may be recognized as tax deductible, bearing in mind that in the current market conditions, Christmas decorations are a requirement set by customers. In the light of the above, it should be considered that these expenses do not meet the indicated definition of representation. In summary, the expenses for the purchase of cut flowers for the interior design of the Company's premises and decorations in the form of Christmas trees, lamps, centerpieces, baubles, Easter eggs, as well as the purchase of decorating services to decorate the Company's building and premises on the occasion of holidays, in the described factual and legal condition, may be included in tax deductible costs pursuant to Art. 15 sec. 1 of the Corporate Income Tax Act. They indirectly contribute to the growth of the Company's revenues, therefore, pursuant to Art. 15 sec. 4d above acts, deducted on the date they are incurred. (...) ".