Flowers accompany us not only in our personal lives, but also in our business activities. Buying flowers as a gift for employees, on the occasion of national or company holidays, and finally funerals. How to approach tax settlements in such a situation?
CIT
Pursuant to Article 15 sec. 1 of the Polish CIT Act, tax-deductible costs are costs incurred in order to generate income from a source of revenue or to maintain or secure a source of revenue, except for the costs listed in Article 16 sec. 1 of the Polish CIT Act.
Point 14 of this regulation indicates that donations are not considered tax-deductible costs.
With regard to the transfer of flowers as occasional gifts, the following should be indicated.
If the flowers are treated as a donation to employees, then this expense will not be included in the tax deductible costs. This position was approved in the individual interpretation of the Director of the National Tax Information of 17 June 2025 (file reference number 0114-KDIP2-2.4010.200.2025.3.PK).
However, individual interpretations also contain dissenting opinions. For example, in the individual interpretation of the Director of the National Tax Information of 18 April 2024 (file reference number 0114-KDIP2-1.4010.57.2024.4.DK), it was indicated that the expense for the purchase of flowers understood as occasional gifts is indirectly related to the conducted business activity as an expense affecting the building of positive relations with employees, and thus may be tax-deductible.
Thus, while there is no convergence in the positions of the tax authorities, in our opinion there are justified premises that would allow the expenses for the purchase of flowers to be included as occasional gifts as tax-deductible costs.
At the same time, the tax authorities distinguish the situation related to the purchase of flowers for funeral ceremonies or state ceremonies. In such a situation, such an expense will be tax-deductible. The above is confirmed, for example, by the individual interpretation of the Director of the National Tax Information on 16 May 2018 (file reference number 0111-KDIB2-3.4010.46.2018.2.PB).
VAT – flowers for employees as gifts or for funeral ceremonies
Pursuant to Article 7 sec. 1 of the Polish VAT Act, the “supply of goods” is understood as the transfer of the right to dispose of the goods as owner.
Pursuant to Article 7 sec. 2 of the Polish VAT Act, the transfer of goods belonging to his business by the taxpayer free of charge by the taxpayer is also considered to be a supply of goods for consideration, in particular:
1. “transfer or use of goods for personal purposes of the taxpayer or his employees, including former employees, partners, shareholders, members of cooperatives and their household members, members of the governing bodies of legal persons, members of associations.
2. any other donations
– if the taxpayer was entitled, in whole or in part, to reduce the amount of output tax by the amount of input tax on the purchase, import or production of these goods or their components”.
The tax authorities are of the opinion that the gratuitous provision of gifts to employees is not either general or indirect related to business activity, as it is a benefit resulting from the Employer’s goodwill and serves to meet the personal needs of the Employees.
Such a position was taken, for example, by the Director of the National Tax Information in its individual interpretation of 17 May 2024, file reference number 0112-KDIL1-1.4012.71.2024.2.AR, indicated that:
“The above-mentioned expenses incurred by you in connection with the purchase of occasional gifts (goods) and vouchers are not/will not be related to sales subject to VAT as part of the Company’s business activity, because, as indicated above, they are used to meet the needs of private employees.”
VAT – public holidays
However, when it comes to the purchase of flowers as part of state ceremonies, the practice of the authorities is different than the above. For example, in the individual interpretation of 14 September 2021, file reference number 0114-KDIP4-2.4012.451.2021.2.AS, the authority indicated that:
“Therefore, the purchase and giving of flowers, garlands and light decorations as well as multimedia occasional decorations as part of national, local and religious celebrations is indirectly related to the general functioning of the Company and its business activity.
The above expenses do not directly contribute to generating turnover, but are incurred in connection with the conducted business activity and indirectly serve taxable activities. In this way, the Applicant builds the image and brand of the Company as a socially friendly and involved in cultural initiatives on a national and local scale.
Therefore, the position of the Applicant regarding the right to deduct input tax resulting from invoices for the purchase of flowers, flags, garlands and light decorations as well as multimedia occasional decorations for the celebration of national, local and religious celebrations is correct.”
