The subsidy from the Polish Development Fund is not revenue and for income tax purposes it is treated as a loan that is not included in tax revenue – confirmed the director of the KIS in the interpretation with reference number 0113-KDIPT2-1.4011.707.2020.2.AP.

What did the Director of KIS explain?

The payment of funds from the Polish Development Fund is therefore tax-neutral for the entrepreneur. Tax neutrality means that tax revenue does not arise also due to the fact that the loan received is interest-free. The interest-free loan is the generally established principle of the program for granting aid under the Anti-Crisis Shield. At the same time – taking into account that the receipt of a loan under the Anti-Crisis Shield does not constitute tax revenue, and the received loan and payment of funds by PFR are tax-neutral for the entrepreneur, the Applicant does not include the return of the loan received under the Anti-Crisis Shield as tax deductible costs.

Since, for the purposes of income tax, the subsidy received under the so-called of the anti-crisis shield is treated as a loan that is not included in tax revenues, and the expenses financed from it are classified as tax deductible costs under general rules. All expenses that were covered from the funds provided by Polski Fundusz Rozwoju S.A. are included in tax costs if they meet the general conditions resulting from tax laws for such classification. The qualification of expenses as tax deductible costs is not changed by the possible remission of the loan.

The Director of KIS also pointed out that if the remuneration of employees and the social security contributions due from them, in the part in which they were co-financed, were not included in tax costs, the co-financing of these costs does not constitute tax income (Article 14 section 3 point 3a of the Personal Income Tax Act). According to the above-mentioned provision, revenues do not include reimbursed other expenses not classified as tax deductible costs.