Tax Benefits for Aid to Ukraine
26 April 2022
Engaging in aid to Ukraine may benefit from several existing and newly introduced tax benefits. Although some regulations came into force in the middle of March – they are effective retroactively, i.e. from February 24, 2022.
Donations to non-governmental organizations (NGOs)
The value of donations made to non-governmental organizations in the form of cash or in-kind donations can be deducted from the income tax base. This applies to both individuals and companies.
The deduction can be up to:
- 6% of income in the case of Personal Income Tax (PIT),
- 10% of income in the case of Corporate Income Tax (CIT).
The deduction may be made by taxpayers who are submitting:
- PIT-36
- PIT-37
- PIT-28
- CIT-8
- CIT-8AB
Only a documented donation is deductible. In the case of a cash donation, it may be a proof of payment into a bank account, while in the case of an in-kind donation, it may be a document containing the donor’s data, the amount of the donation, and the donee’s statement of acceptance.
Voluntary Blood Donation
Persons who donate blood or plasma as voluntary blood donation may deduct from their tax base the equivalent of:
- 130 PLN for each liter of blood donated,
- 200 PLN for each liter of plasma donated.
This deduction is included in the limit set for the deduction for donations for public benefit, which is up to 6% of the income earned in a given tax year.
Compensation for providing accommodation and meals to citizens of Ukraine
Any entity (including natural persons) that provides accommodation and meals to citizens of Ukraine may apply for a cash benefit of PLN 40 per person per day.
The benefit is due for a period of up to 60 days. The application should be submitted to the municipality administration.
The amount received is fully exempt from income tax.
Aid as a tax-deductible cost
Companies donating aid to Ukraine may recognize as tax-deductible expenses (both in PIT and CIT) the expenses incurred between 24 February and 31 December 2022 for the production or acquisition costs of goods and rights donated as part of the aid and for gratuitous services (e.g. free medical assistance). Costs may include aid provided through:
- non-governmental organizations (including from Ukraine),
- local government units,
- Government Strategic Reserve Agency,
- entities performing medical activities and medical rescue on the territory of Poland and Ukraine.
0% VAT
The free of charge supply of goods or services in the period from 24 February to 30 June 2022, for the purposes related to aid for victims of warfare in Ukraine, has been taxed with the 0% VAT rate.
Although the detailed scope of services covered by this rate is not strictly defined, it applies only to those services that are offered to:
- Strategic Reserve Agency,
- medical entities,
- local government units.
Application of the 0% VAT rate requires a written agreement between the taxpayer and one of the above-mentioned entities. The content of the agreement must unequivocally state that the donated goods or services will be related to the aid for victims of the Russian aggression against Ukraine.
Exemption from the so-called “Estonian CIT”
During the period from February 24 to December 31, 2022, exempt from taxation is income from non-business expenses incurred for the manufacture or acquisition of goods or rights that are the subject of donations made for purposes related to counteracting the effects of warfare on the territory of Ukraine and costs incurred for the provision of gratuitous services for the same purpose.
The exemption is applied only to the costs of donations and benefits to:
- public benefit organizations or equivalent organizations on the territory of Ukraine,
- local government units,
- Government Strategic Reserve Agency,
- entities performing medical or emergency activities in Poland or Ukraine.
Benefits for Ukrainian citizens
PIT exemption for beneficiaries of humanitarian aid
Citizens of Ukraine who arrived in Poland between February 24 and December 31, 2022 and benefit during this period from humanitarian aid (e.g. in the form of financial or material donations) do not have to pay PIT on this account. This also applies to aid received from non-governmental organizations.
Gift tax
The regulations on donations have not changed. Citizens of Ukraine receiving a donation do not have to pay the gift tax, as long as the value of the acquired property or property rights from one person or organization does not exceed PLN 4,902 per person within 5 years.
Eligibility for family and social assistance benefits
A citizen of Ukraine legally residing on the territory of the Republic of Poland is entitled to family benefits and, if he resides with his children on the territory of the Republic of Poland, also to:
- upbringing benefit (500+),
- good start benefit,
- family care capital,
- a subsidy to reduce the parent’s fee for the stay of the child in a day nursery, children’s club or with a daycare provider.
One-off cash benefit
A citizen of Ukraine, who legally resides in Poland and who has been entered into the PESEL register, is entitled to assistance in the form of a single cash benefit of PLN 300 per person, intended for subsistence, in particular to cover expenditure on food, clothing, footwear, personal hygiene products and housing fees.
Legal basis:
Act of 12 March 2022 on aid to citizens of Ukraine due to armed conflict on the territory of the country (Journal of Laws of 2022, item 583 [PL]).
Regulation of the Minister of Finance of 3 March 2022 amending the regulation on goods and services for which the rate of tax on goods and services is reduced and the conditions for the application of reduced rates (Journal of Laws of 2022, item 531 [PL]).
Regulation of the Minister of Finance of 18 March 2022 on the abandonment of the collection of lump-sum tax on income of companies due to counteracting the effects of hostilities on the territory of Ukraine (Journal of Laws of 2022, item 641 [PL]).
If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.
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