Today, the pressure of competition and the increasing demands of customers are common in many industries, and many entrepreneurs need to constantly deepen their professional expertise. There are many industries where obtaining a scientific title distinguishes the entrepreneur on the market and attracts customers (e.g. medical industry, legal services). one from the possibility of deepening knowledge is conducting studies, e.g. postgraduate or PhD.
The question of whether an entrepreneur can charge the related expenses to the cost of obtaining income is not clearly answered. It depends on what studies are and for what purpose they are undertaken.
What is the cost of obtaining income?
According to Article 22(1) The income tax laws on natural persons are the costs of obtaining incomes incurred in order to obtain income or to preserve or secure the source of income.
Therefore, the cost of obtaining revenue is exclusively those expenditures which remain due to the cause and effect of obtaining revenue from the source concerned, as well as its behaviour or protection of the source of revenue.
The causal link should be understood as a rational and economically justified link between the expenditure and the activities carried out. Importantly, the cost of obtaining income will be both the expenditure directly linked to the revenue received and the indirect expenditure if it has been reasonably incurred to obtain revenue.
Expenditure may be the cost of obtaining income even if the income is not achieved for objective reasons. The Personal Income Tax Act does not contain a list of expenses which may constitute the cost of obtaining income. However, it contains a list of expenditure that cannot be incurred (listed) under Article 23 Act.
Derivation of tax studies possible under certain conditions
Expenditure related to doctoral studies is not included in the list of expenditure not considered to cost revenue included under Article 23 Act.
Therefore, in order to answer this question, it is necessary to examine whether improving qualifications will actually affect the competitiveness of the entrepreneur and his business and whether he will expand the customer circle and consequently result in an increase in revenue.
The strong competition in most industries makes it necessary in almost every case to develop specialization and obtain additional competences and to ensure the image attractiveness of the entrepreneur and thus attracts customers, allowing them to provide services of a higher standard and quality.
Thus, expenditure on doctoral studies (e.g. tuition fees for studies) can be the cost of obtaining income within the meaning of Article 22 Personal Income Tax Act. However, studies must be selected according to the scope of the PKD and according to the activities carried out. Thus, e.g.
an entrepreneur entered in the register as a provider of advertising services, with only this classification registered to PKD and not fulfilling any other scope, will not be able to write off the tax of studies e.g. veterinary.
Example
Director of the Tax Chamber in Warsaw in an individual interpretation dated 19 September 2016 (Signature: IPPB1/4511-854/16-3/AM) has examined the proposal of a legal adviser who, having regard to the corporate training obligation (according to Article 14 The Code of Ethics of the Legal Advisor), the need to raise his skills and competitive pressures on the market of legal services and customer requirements, as well as the desire to deepen professional specialisation, made efforts to obtain a doctorate in legal science. The Authority pointed out that great competition in the legal services market makes the development of specialisation and the acquisition of additional competences necessary and distinguishes the legal advisor in this market, ensuring image attractiveness by attracting customers, allowing them to provide services of higher standard and quality.