Banking fees charged by Pay Pal can be an expense!
Electronic payments are a fast and increasingly preferred by customers method of paying, especially for purchases made in online stores. Therefore, entrepreneurs more often decide to allow customers to use quick and convenient payment methods through external companies / banks. Since the use by entrepreneurs of the services of platforms such as Pay Pal entails the need to pay commissions deducted for intermediation in payments, the entrepreneur would want to include these commissions as a tax cost. But how can this be done?
The issue of whether the commission charged to transactions made via Pay Pal is a cost or has not been resolved, inter alia, in the individual interpretation issued by the Director of the Tax Chamber in Warsaw (IPPB1 / 415-599 / 11-4 / ES). The tax authority decided that if the transactions for which the commission is charged are related to the conducted activity, they may constitute the company's tax expense. Therefore, because bank fees by Pay Pal are calculated in relation to payments for goods / services made by customers, there is a relationship with the activity, so the first condition for them to become a cost has been met.
However, in order to be considered an expense as a cost, apart from the fact that it has a cause-and-effect relationship with the income generated from the activity, it must also be properly documented. This is where the problem arises because Pay Pal does not practice invoicing. Each user registered on the platform has an individual account after logging in to which he has access to the history of transactions made via Pay Pal. It is possible to print confirmations - a list of transactions which also include the amounts of individual commissions. However, will it be a sufficient accounting document? Well, in most individual interpretations issued, the tax authorities skillfully avoid the issue of the correctness of documenting the said transactions. Experts speak differently on this issue, recognizing in some statements that Pay Pal should be treated like a bank because it is recognized as such abroad and therefore the statements constitute accounting evidence, others refer to the Luxembourg law, according to which the printouts of the transactions with Pay Pal can be considered proof of sale, and the tax authorities are rather silent on this matter.
Only the judgment of the Supreme Administrative Court of 2010 (I SA / UI 878/09) is known, in which it was found that the transaction statement from the Pay Pal account is not sufficient evidence to incur the cost. Here, however, it was not about the commission for the agency of Pay Pal, but for recognizing the proof of the statement as proof of purchase. So this is not an explanation of the recognition of a commission as a cost.
Entrepreneurs, therefore, still practice posting commission charged on accepting payments for goods or services via Pay Pal on the basis of transaction printouts available to them to tax deductible costs. As it is a transaction with a foreign contractor, it will be an import of services for the Polish entrepreneur. Due to the fact that this is a financial service, and in Poland they are exempt from VAT, they should be taxed with the "zw" rate and shown both on the side of the VAT register of sales and the VAT register of purchase (this option is available to active VAT taxpayers). Consequently, the transaction becomes VAT neutral.
However, you should be aware that the tax authorities have still not issued an unambiguous answer on the correctness of documenting the costs of commissions charged by Pay Pal.