The sponsorship tax relief is a solution introduced as part of the Polish Deal programme. It allows entrepreneurs supporting sports, culture and science to obtain tangible tax benefits. Thanks to this, you can deduct up to 150% of incurred costs, provided certain conditions are met. Check how the sponsorship tax relief works, who can use it and what expenses qualify for the deduction.
Table of Contents
- What Is Sponsorship Tax Relief?
- Who Can Benefit From the Sponsorship Tax Relief?
- Which Expenses Qualify For the Sponsorship Tax Relief?
- Sponsorship vs. Donation – The Key Difference
- How to Settle Sponsorship Tax Relief?
- Sponsorship Tax Relief – Can You Deduct VAT On Sponsorship?
- Sponsorship Tax Relief – Summary
- FAQ – Questions and Answers about Sponsorship Tax Relief
What Is Sponsorship Tax Relief?
The sponsorship tax relief was introduced on 1 January 2022 and regulated in Art. 26ha of the PIT Act and Art. 18ee of the CIT Act. The mechanism of its operation is based on the double settlement of the same costs:
- firstly – as standard tax-deductible costs (100%),
- secondly – as an additional deduction from the tax base in the amount of 50%.
In practice, an entrepreneur who finances, for example, sports training in a club, can deduct a total of 150% of the value of the expense. Unlike a donation, sponsorship requires reciprocal performance. The sponsored entity must provide the sponsor with certain benefits. For example, advertising or promotion.
Who Can Benefit From the Sponsorship Tax Relief?
The tax preference is intended only for entrepreneurs. It can be used by:
- PIT taxpayers conducting non-agricultural business activity, settling according to the tax scale or flat tax,
- CIT taxpayers who receive income other than from capital gains.
The relief does not apply to individuals earning income from employment, civil law contracts, or personally performed activities. They cannot include sponsorship expenses as tax-deductible costs.
Which Expenses Qualify For the Sponsorship Tax Relief?
The scope of eligible costs is relatively broad. The legislator defined three main categories:
- sports activities,
- cultural activities,
- higher education and science.
In sports, you can finance sports club activities, non-mass sport events, and scholarships. It is important that a sports club operates in accordance with the Sports Act and is not profit-oriented. However, it can take various legal forms, including a capital company.
Cultural activities include support for cultural institutions entered in the register. For example, theatres, operas, philharmonics, art galleries, and universities or art schools. Sponsorship in this area often takes the form of financing artistic events, exhibitions or concerts.
The third category – higher education and science – allows for the relief to include academic scholarships, financing of postgraduate studies of employees, costs of internships, dual studies or salaries of graduates for the first months of employment.
Sponsorship vs. Donation – The Key Difference
One of the most common mistakes entrepreneurs make is equating sponsorship with a donation. Meanwhile, these are completely different institutions. A donation is a unilateral benefit. It does not constitute a tax-deductible cost. The provisions of Art. 23(1)(11) of the PIT Act and Art. 16(1)(14) of the CIT Act explicitly exclude this. Sponsorship, on the other hand, must be associated with a reciprocal benefit. For example, the display of the logo or information about the sponsor. Only then can it be treated as a cost and additionally qualify for the relief.
How to Settle Sponsorship Tax Relief?
The deduction is made in the annual return – PIT or CIT – for the year in which the sponsorship costs were incurred. The taxpayer is obliged to attach the relevant form: PIT-CSR or CIT-CSR. It indicates the costs incurred for sports, culture and science.
Documenting expenses is crucial. Sponsorship agreements and proofs of incurred costs are the basis. In the case of financing student internships or dual studies, it is also necessary to conclude a relevant agreement with the university. The relief cannot be applied to expenses reimbursed to the taxpayer in any other way, e.g. through grants.
Sponsorship Tax Relief – Can You Deduct VAT On Sponsorship?
Sponsorship expenses may qualify for VAT deduction if related to the taxpayer’s business. Since sponsorship is generally associated with advertising in its nature, there is a link with the business activity. Therefore, VAT deduction is possible. The standard conditions set out in the VAT Act must be obviously met, too.
Table – Eligible Cost Categories under Sponsorship Tax Relief
| Category | Examples of Qualifying Expenses |
| Sport | sports training, purchase of equipment, sports scholarships, costs of using facilities, organising competitions |
| Culture | financing theatres, operas, philharmonics, art galleries, and art schools |
| Science and education | research scholarships, postgraduate studies, apprenticeship and trainee salaries, dual studies |
Sponsorship Tax Relief – Summary
Sponsorship relief is a tool that allows you to combine business benefits with socially beneficial activities. Thanks to it, entrepreneurs supporting sports, culture, and education can deduct an additional 50% of eligible costs. In total, one can settle as much as 150% of expenses. However, to use the benefit, it is necessary to structure the sponsorship agreement properly and document all incurred costs.
If you are planning to sponsor a sports club, cultural institution or university and want to make sure that you use the tax relief correctly, contact us. We will advise you on how to draft a contract, document costs, and deduct them safely in your tax return.
FAQ – Questions and Answers about Sponsorship Tax Relief
1. What is the sponsorship tax relief?
A tax preference that allows for the deduction of an additional 50% of tax-deductible costs incurred for sports, culture and education.
2. Who can benefit from the sponsorship tax relief?
PIT taxpayers conducting business activity. CIT taxpayers who incur eligible sponsorship expenses.
3. Does the sponsorship relief apply to natural persons who do not conduct business?
No, the preference applies only to entrepreneurs.
4. What costs qualify for tax relief in the sports sector?
For example, financing sports clubs, competitions, sports equipment and scholarships.
5. Can cultural expenses be accounted for in this relief?
Yes, if they concern registered cultural institutions or art schools.
6. What expenses for education and learning are covered by the relief?
Scholarships, postgraduate studies, apprenticeship salaries, dual studies, and employment of graduates.
7. What is the legal basis for the relief?
Article 26ha of the PIT Act and Article 18ee of the CIT Act.
8. Can sponsorship be confused with a donation?
No – the donation is unilateral and does not constitute a tax expense. The sponsorship assumes reciprocal performance.
9. Does the relief reduce tax advances during the year?
No, it only applies in the annual return.
10. Is it possible to deduct VAT on sponsorship expenses?
Yes, if the expenses are related to the sponsor’s business activity.
