Business Donations and Entertainment Expenses — How to Settle Them in 2026

Entertainment vs Advertising — The Key Distinction

This is the most important distinction in Polish tax law:

• Advertising — fully deductible as KUP. Activities aimed at an unspecified group of recipients (potential customers). Examples: advertisements, printed materials with a company logo, low-value branded gifts
• Entertainment (reprezentacja) — NOT deductible as KUP. Expenses directed at specific, individually known clients or partners (dinner, expensive gift, an evening at the theatre). Purpose: maintaining or strengthening relationships with specific individuals

Tax office practice: any "direct" contact with a specific person = entertainment, therefore not KUP.

Branded Gifts with Company Logo

Exception: branded gifts with a company logo may qualify as KUP, but only if:

• They are low in value (customarily below 200 PLN)
• They bear a visible logo that genuinely promotes the company
• They are distributed to a broad audience (clients, partners, events)

An expensive branded gift (laptop, sports equipment) — NOT deductible as KUP; treated as entertainment.

Team-Building Events and Company Christmas Parties

Events for employees:

• Christmas party, Women's Day, team-building — deductible as KUP if all employees are eligible to attend (equal treatment principle)
• VAT — 100% deductible if invoices are issued to the company
• Amount — no fixed limit, but must be reasonable (audits flag cases such as 5,000 PLN per person)

Events with client attendance — a grey area; the tax office typically classifies them as entertainment.

Donations — When Deductible, When Not

Business donations may qualify as KUP in specific cases:

• Food donations for charitable purposes — deductible as KUP up to 1,000 PLN (to public benefit organisations registered in KRS (National Court Register))
• In-kind donations for crisis response (ad hoc, statutory basis)
• Cash donations — as a rule, NOT deductible as KUP. Individuals may deduct up to 6% of income in PIT (personal income tax) as a tax deduction

Formal requirement: a written donation agreement plus documentation from the recipient (certificate from the public benefit organisation).

Holiday Bonuses and Vouchers

• Goods/services vouchers for employees (e.g., prepaid card, shopping voucher) — fully deductible as KUP, but constitute employee income (PIT (personal income tax) at 12–32% from employment)
• Cash bonuses — deductible as KUP; employee income (full PIT and ZUS (social insurance contributions))
• Holiday gift packages — up to 1,000 PLN per year per employee may be exempt from PIT (funded from ZFŚS (Company Social Benefits Fund) or from business operating funds with proper documentation)

Frequently Asked Questions