Act of 12 March 2022 on the aid to Ukrainian citizens in the aftermath of the military conflict in Ukraine (”Special Act”)1 provides for a possibility to taxpayers to include in tax deductible costs the expenses for manufacture, or a price of purchase of things and rights used for purposes relating to counteracting consequences of warfare in Ukraine, i.e., donations made to specific entities, namely:

•     non-governmental organizations and public purpose organizations,
•     local government units,
•     the Government Strategic Reserves Agency,
•     entities which carry out medical care activities or provide emergency medical services in the territory of the Republic of Poland or Ukraine.

The Special Act provides for a possibility for taxpayers to include in tax deductible costs the donations in the amount of 100% only, in spite of the fact that in the case of the fight against COVID 19 pandemic a similar relief allowed the taxpayers to include donations in the amount of 200%. The preference in question is intended to apply from 24 February to 31 December 2022.

The sole possibility, that has existed to date, for taxpayers to include their aid in the tax deductible costs arises from Art. 18 Sec. 1 Subsec. 1) of the CIT Act and Art. 26 Sec. 1 Subsec. 9) of the PIT Act. The said provisions make it possible for taxpayers to deduct from the taxable basis the donations made in favor of public purpose activities (maximum: up to 10% of income of CIT payers and up to 6% of income of PIT payers).

More details about the Tax Alert HERE