From the beginning, Poles support refugees coming from Ukraine. Fortunately, there are several tax solutions which are making easier supporting those in need, and the government has announced that it will pass a special act on helping Ukrainian citizens. The Ministry of Finance declared that it will introduce a lot of tax reliefs for supporters and the refugees.
The current regulations allow for the transfer of 1% of income tax to public benefit organizations, deduction from income tax of donations made for public benefit activities, i.e. for public benefit organizations (OPP), as well as foundations and associations operating in the EU and the European Economic Area (EEA). If we want to help a specific person from Ukraine, such a donation cannot be deducted at the moment in the tax declaration. However, it is possible to deduct a donation made for the foundation with an indication that the support should go to a specific refugee. The bestowed citizen of Ukraine does not have to pay income tax, because the use of humanitarian aid from non-governmental organizations does not generate a tax liability.
The relief is dedicated to those settling accounts using the PIT-28, PIT-36, PIT-36L, PIT-37, CIT-8, CIT-8AB forms. It is necessary to prove the donation with a proof of payment (cash donation) or a document pointing out the value of the donation and the details of the recipient, together with a declaration of donation’s acceptance. The gross value of the goods (including VAT) is considered to be the amount of the non-monetary donation. The regulations allow donations to be deducted up to 6% income in PIT and up to 10 percent income in CIT.
The relief is dedicated to those settling accounts using the PIT-28, PIT-36, PIT-36L, PIT-37, CIT-8, CIT-8AB forms. It is necessary to prove the donation with a proof of payment (cash donation) or a document pointing out the value of the donation and the details of the recipient, together with a declaration of donation’s acceptance. The gross value of the goods (including VAT) is considered to be the amount of the non-monetary donation. The regulations allow donations to be deducted up to 6% income in PIT and up to 10 percent income in CIT. The limits apply to all donations in total.
Blood donations by honorary blood donors are also deductible from income tax. Such a donation is deducted from the income in the amount corresponding due to the equivalent for donation of blood or plasma. The amount of such a donation should be included in the previously indicated limits.
It should also be remembered that every person receiving a donation does not pay tax on this account, as long as the value of the benefit from one person (in cash or in kind) does not exceed PLN 4,902 within last five years.
In terms of VAT, on March 5, an amendment to the Ordinance of the Ministry of Finance regulating preferential VAT rates entered into force. It introduces a tax relief for the purposes of helping victims of the effects of hostilities on the territory of Ukraine. The 0 percent rate includes free services and delivery of goods provided to: the Strategic Reserves Agency, medical entities and local government units. The condition for use the relief is a written contract, which will indicate that the donated goods or services will be related to helping the victims of the Russian aggression against Ukraine. This means that the contract can be signed electronically or by hand and sent by e-mail to be signed by the recipient of the donation. The change will apply to donations made from February 24 and will be effective until June 30. In the case of donations made before March 5, the parties should confirm in writing that the goods were delivered or the service was performed for purposes related to the aid.
The announced tax law changes are intended to exempt refugees from donation tax, the possibility for companies to count the donations provided as costs, as well as exemption from PIT of free benefits.
The exemption is to cover the ownership of goods or property rights obtained as a donation is to apply from February 24 to December 31, 2022.
The announced possibility of including the costs of manufacturing or the purchase price of goods and rights as tax costs will apply to donations made from February 24 to December 31, 2022 for purposes related to counteracting the effects of hostilities on the territory of Ukraine for the benefit of non-governmental organizations (also from Ukraine), local government units, the Governmental Agency for Strategic Reserves or entities performing medical activities and in the field of medical rescue in the territory of Poland and Ukraine. This means that free services are also costs, e.g. free medical assistance provided by Polish doctors, will be a tax deductible cost.
Moreover, refugees from Ukraine staying in Poland and receiving benefits from natural persons and companies will be exempt from paying income tax. The relief is to cover all benefits, regardless of their type (money, in kind and free of charge).
The special act is also to introduce a simplified method of legalizing the stay of refugees, their registration by municipalities, the possibility of employment on the basis of a notification at the employment office, a one-off benefit for maintenance and access to a wide package of social and health benefits as well as education.
The measures announced by the government should be assessed as positive changes that will encourage people to actively support those in need.