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Entrepreneurs can take advantage of many different types of grants and subsidies. Receiving some of them requires careful and expensive preparation of documentation, although submitting it does not guarantee receiving support. In this case, a question arises – can the expenses related to applying for a subsidy be included in the tax deductible costs in the event of a failure?

The provisions of the PIT Act do not directly regulate the issue of recognizing the expenditure on the preparation of a subsidy application as a cost.

As always, in such a case, taxpayers need to follow the general rule expressed in Art. 22 sec. 1 of the PIT Act, which indicates that tax deductible costs are costs incurred in order to achieve revenue or maintain or secure a source of revenue, with the exception of the costs listed in art. 23 sec. 1.

In the aforementioned Art. 23 sec. 1 of the PIT Act, expenses for the preparation of a subsidy application are not excluded from the tax costs.

The definition of tax deductible costs includes both those expenses that directly translate into obtaining specific revenues, as well as those that cannot be attributed to specific revenues in this way, but are rationally justified as aimed at achieving them. It does not matter whether the effect expected at the time of incurring the expense actually occurred. Only an objective assessment of the purposefulness of a given expenditure is important.

As indicated by the IS Director in Katowice of 7th April 2011, no. IBPBI/2/423-67/11/JD:

In the presented facts, the Company incurred expenses related to the preparation of applications for subsidies. In the opinion of the local authority, the expenses in question are not directly related to the revenues obtained, however, it should be noted that they are related to the functioning of the Company and as such constitute indirect tax deductible costs, regardless of the final effects of the efforts to obtain a subsidy.

As a result, even if the taxpayer does not finally receive the subsidy, this circumstance does not exclude the possibility of including the expenditure on the preparation of the application as tax deductible costs.

Taking the above into account, expenses should be included in tax deductible costs at the time they are incurred.

Marcin Sądej, Redaktion