By Dr Robert Lewandowski, attorney at law (radca prawny) at Derra, Meyer & Partners in Warsaw
The Polish tax authorities have been of the opinion for many years that costs of buying suits, uniforms and shirts by business people for business purposes (e.g. meetings, trips, speeches and also daily business life at work etc.) cannot be deducted as tax related expenses and this opinion was subject to many controversies in the past. Due to a wave of criticism, tax authorities have recently lifted their stiff view on this issue a little bit and they are prepared to accept the costs related to buying business suits/shirts as deductible costs under three conditions: (1) first, the suit /shirt to be used by business people shall be sufficiently identified by a marking as a garment connected with the company (entity) in which they work. Thus, according to tax authorities placing the initials of the company’s business name or its logo on the clothes may not be sufficient to meet this first requirement. (2) Secondly, the marking has to be firmly attached to the clothes, so it means that any sign (logo) of the company which will only be stuck to the clothes material and may be removed at any time will not be approved. (3) Thirdly, the identification mark must be perceived visually by third parties and cannot be hidden for instance inside of the clothes.
It seems that the aforementioned requirements could be rather easily met by employees working in shops and restaurants or petrol stations as it is rather common that these workers wear clothing marked with their company’s business name on their backs or collars due to daily advertising activities. A problem arises when high executives, company’s directors or attorneys at law will suddenly be asked to equip their suits/skirts with sufficient (firmly) attached visible names of their corporations which can be long and this would rather cause difficulties, reasons to smile and head- shaking. It is also unclear as to whether additional items while wearing suits/skirts such as cufflinks or ties can also be settled as cost deducted expenses. Therefore this recent decision by the Polish tax authorities is too restrictive, far-fetched and unsuitable for most professionals.
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