Tax preferences for taxpayers who support the victims of the war in Ukraine

• to the following entities only:

• the Governmental Agency for Strategic Reserves,
• local government units,
• medical entities;

• if a written agreement is concluded stating that the delivered goods and services will be used for the purposes of helping victims of the consequences of hostilities in Ukraine.

As a consequence, not all aid provided to the victims of the war in Ukraine will be able to benefit from the preferential 0% VAT rate.

In addition, the draft act amending the CIT Act, published on March 7, 2022, makes it possible to include in tax deductible costs expenses incurred for the purchase or production of goods or rights that are the subject of donations and free benefits provided in the period from February 24, 2022 to December 31, 2022. for purposes related to counteracting the effects of hostilities in Ukraine.

The CIT taxpayer who intends to donate to the victims of the war in Ukraine, according to the draft, will have the right to include in tax costs the expenses incurred for the purchase of goods or rights being the subject of such donation, provided that they are transferred to:

• public benefit organizations;
• local government units;
• the Governmental Agency for Strategic Reserves;
• entities performing medical or emergency medical activities.

At the same time, it should be mentioned that for many years it has been possible to deduct, up to the amount of income, the value of the actual donation made for charity and care for:

• the Catholic Church in the Republic of Poland,
• Polish Autocephalous Orthodox Church.

Donation to the above-mentioned Church entities can be included in the costs already when calculating withholding tax.

The amount of the donation is the value of the goods plus VAT (in the part exceeding the amount of the input tax, which is deductible). The condition for documenting a donation is, inter alia, received reports on the purpose of the donation - within two years from the date of its transfer. When making a donation, it can be noted that its purpose is charity and care for the victims of the war in Ukraine.

Downloads

• PKF Alert - Tax preferences for taxpayers who support.pdf [PDF]