Materials with the company's logo - settlement in costs

Service-Tax

In the era of enormous competition, attracting the attention of a client or contractor is a priority. One method of operation that can help with this is to equip the company with materials bearing the company's logo. These materials should have the taxpayer's logo or other markings distinguishing a given company, e.g. a trademark. However, can the cost of purchasing advertising materials be included in company costs? What is this issue from a tax point of view? Any ambiguities will be resolved in this article.

Income tax company logo materials

Expenses incurred for the purchase of materials with the company's logo can be classified as tax deductible costs. Assuming these materials are of little value and symbolic in nature, they are not representation costs. If they were representation costs, they could not be classified as tax deductible costs.

According to the interpretation of the Director of the Tax Chamber in Warsaw of April 19, 2013, No.IPPB5 / 423-100 / 13-3 / MK: expenses incurred for the purchase of gifts marked with the taxpayer's logo (given to potential customers) may be included in tax deductible costs only if the gifts will be distributed on a large scale, i.e. they will be given to each interested entity.

In connection with the above, the costs incurred for materials with the company's logo can be classified as tax costs, if these materials are intended for all potentially interested customers or contractors.

In summary, expenses for materials with a company logo are a tax cost if:

  • are symbolic in nature,
  • have little value,
  • are intended for an unmarked group of recipients.

VAT due and input VAT

The VAT due is the value of VAT on the sale of goods or services to customers or contractors.

Input VAT is the VAT amount resulting from the purchase transaction.

VAT due - tax charged = tax paid to the tax office

Materials with the company logo in VAT

As stipulated in the provisions of the VAT Act, tax is imposed on the free transfer of goods belonging to the taxpayer's enterprise, in particular:

  • transfer or consumption for personal purposes of the taxpayer or its employees, including former employees, partners, shareholders, stockholders, members of cooperatives and their household members, members of governing bodies of legal persons and members of the association;
  • any other donation.

The above applies if the donor was entitled in whole or in part to deduct the input VAT on obtaining materials with the company's logo.

However, it should be borne in mind that the taxation of free transfer of materials with the company's logo depends on the right to deduct input VAT due on their purchase. Well, the taxpayer has the right to deduct input VAT on the purchase of goods if, by transferring them, the taxpayer intended to increase his sales. It also means that the free transfer of goods is subject to VAT.

Items with the entrepreneur's logo that meet the definition of a gift of small value are exempt from VAT.

Gifts of low value are given to one person by the taxpayer if:

  • their total value does not exceed the amount of PLN 100, if the donor keeps a list of the recipients, allowing their identity to be established;
  • the unit net purchase price of the goods or the unit cost of its production, at the time of transfer, does not exceed the amount of PLN 10.

In connection with the above, VAT on materials with the company's logo resulting from their free transfer will not take place if the unit price exceeds PLN 10 and the entrepreneur keeps records of the recipients. Then, until the value of the material provided with the company's logo does not exceed PLN 100, there is no obligation to tax this activity in a given tax year.