When can I include an expense as an expense ?
The expense part, if you run your own business, is beneficial from a tax point of view, as it allows you to reduce the amount of income tax.
According to the CIT Act, deductible expenses are all expenses incurred in order to achieve revenue.
CIT for legal entities (9% or 19%) is calculated as follows - your income minus your expenses.
You must also comply with a list of requirements and rules on how to properly record expenses:
- The expense in question relates to your business;
- There must be an invoice confirming the purchase of goods, materials or services.
Deductible costs can be divided into direct costs and indirect costs.
Direct costs are, for example:
- Trade goods;
- Subcontracted services;
- Wages and salaries of production staff.
Indirect costs refer to costs related to the business but which do not directly affect the revenue generated - they are costs related to the taxpayer's overall operations:
- Internet domain;
- Accounting services;
- Legal services;
- Maintenance and equipment of the premises (rent, utilities);
- Bank charges;
- Leasing;
- Depreciation;
- Advertising costs;
- Expenses related to the use of vehicles, including fuel costs (if the vehicle is used for personal purposes, 50% is written off in the price of fuel, if only for business purposes - 100%).
With regard to costs in foreign currencies, costs are translated into PLN at the average exchange rate announced by the National Bank of Poland on the last working day preceding the day on which the costs were incurred.
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