Tax consequences of free software in the company


Daily work in a company requires a number of necessary tools. Among them are computer programs, which are the basic means of systematizing the day-to-day work of its employees. Therefore, when choosing the most convenient program, it is worth getting acquainted with the rich offer of various manufacturers who, in addition to traditional software, also offer free tools distributed, for example via the Internet. What are the tax consequences of free software in the company?

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The use of free software is especially appreciated by entrepreneurs who want to save some of their financial resources in this way, because deciding to choose such a tool does not involve any fees for its purchase and the payment of license fees. However, is it really free to use programs in this way? Pursuant to Art. 14 sec. 2 point 8 of the Personal Income Tax Act, the value of received benefits in kind and other free benefits is also considered to be income from activity. Therefore, it is necessary to consider whether the use of free software should be recognized as income from a gratuitous benefit and, as a result, taxed with income tax?

The regulations do not explicitly define the term "free of charge". Therefore, in accordance with the Tax Interpretation IBPB1 / 415-331 / 08 / MW and the language interpretation free means not requiring payment; one that is not paid for; free of charge (New Dictionary of the Polish Language, PWN, 2003). In the light of the above statement, it should be considered that for tax purposes, a free benefit is understood as all legal or economic events which result in free of charge, that is, a gain in the taxpayer's property with a specific financial dimension, not related to costs or other form of equivalent. Moreover, in order to fully explain the discussed issue, one should also read the rest of the interpretation concerning the concept of "benefit". According to it, it is believed that the service is subjectively specific and assumes that, on the one hand, there is an entity that may demand its provision, and on the other hand, another entity that should provide a given service.

The cited interpretation of the concept of "free service" does not therefore refer to free computer programs that are widely available and each interested party can use them on their own. Such a situation is possible because the producer who makes his product available free of charge does not provide any service to future users, but only allows them to use it.

In the scope of the discussed issue, Art. 11 sec. 2a point 4 of the Personal Income Tax Act, because this software is made available free of charge to all interested users on the same terms. Therefore, it cannot be unequivocally compared to another similar paid product and thus its market price can not be established.

In the light of the cited jurisprudence, it can be unequivocally stated that the use of computer programs available free of charge on the Internet does not result in the generation of income from gratuitous services. Therefore, it is worth considering their use in every enterprise.