Who and how can deduct a donation to help the citizens of Ukraine in connection with the armed conflict on the territory of this country
Individuals and entrepreneurs who support Ukraine by making donations through non-governmental organizations operating in the EU and the European Economic Area can reduce their tax by deducting donations.
In order to be able to deduct a donation for supporters
of Ukraine, it must be properly documented, i.e. in the case of a donation:
• monetary – proof of payment to a bank account,
• non-monetary / good or service – a document indicating the donor’s data and the value of the donation together with the recipient’s statement of acceptance.
In accordance with the Act of 12 March 2022 on assistance to citizens of Ukraine in connection with armed conflict on the territory of this country, entrepreneurs have the right to include donations in tax costs, regardless of their basic business profile.
The tax costs may include donations made in the period from
February 24, 2022 to December 31, 2022.
In accordance with art. 52zf of the PIT Act, tax-deductible
costs may include a donation (material or in the form of services) for purposes related to counteracting the effects of war.
When making a non-monetary donation, the entrepreneur should have a confirmation of transfer of the item.
For this purpose, it is safest to draw up a donation agreement.
However, if this is not possible, it is worth drawing up a statement on the donation to a given organization, in which information about the number of donated goods, their value and special features will be indicated.
In addition, the statement should contain information about the purpose for which the donation was made, i.e. “for purposes related to counteracting the effects of hostilities on the territory of Ukraine” or even more detailed.
Of course, a donation can also be a service (e.g. transport) provided by the company.
Then the costs incurred for such a donation can be included in tax costs.
That is, for example, a company purchases dressing materials on invoice (although its basic form of activity is, for example, consulting), transfers the purchased dressing materials to the appropriate organization and receives a confirmation of donation from this organization, where it will be specified what organization it is, what quantity and value of these dressing materials are and for what purpose, i.e. for purposes related to counteracting the effects of hostilities in Ukraine (or in more detail). Then such a company has the right to include its purchase invoice in tax costs.
The exception to the inclusion in tax costs is the purchase of food products, which are alcoholic beverages with an alcohol content above 1.2% and alcoholic beverages that are a mixture of beer and non-alcoholic beverages, in which the alcohol content exceeds 0.5%.
The legislator met the taxpayers by introducing a 0% rate on donations made to help Ukraine.
Importantly, the rate of 0% VAT can be applied only to supplies of goods or services made to:
• the Government Agency for Strategic Reserves,
• medical entities within the meaning of Article 0% of the European Union. Article 4 (1) 1 of the Act on Medical Activity
• local government
unitsIn any other case, unfortunately, you have to remember to charge VAT, unless the previously purchased goods were related to the conducted business activity.