A foundation that offers teachers free or symbolic access to their own training portal will be able to deduct 100% of the expenses incurred in creating the portal - confirmed the director of the National Fiscal Information.
The educational foundation that received a grant to create an online training platform asked about this. They expected to incur many expenses, including subcontractor salaries, marketing material costs, conference organization, webinars, workshops, and training for teachers while creating the portal.
In the initial phase of the portal's operation, the foundation planned to train about 3,000 public school teachers with the help of it. The training would be free or for a symbolic fee. The promotion would aim to expand the future user base of the portal to even several hundred thousand (there are so many teachers in Poland). Participation in each subsequent educational course would require paying the standard price. These services would be subject to VAT (the foundation would not use any tax exemptions).
The foundation wanted to make sure that it would be able to deduct the entire amount of input tax included in the expenses incurred, both in the case when teachers use the portal free of charge and when they pay a symbolic fee. It explained that the expenses incurred in creating the portal would be related to its self-promotion and advertising, which would allow it to acquire new customers. It emphasized that setting promotional prices in the initial period of operation is a common market practice that allows for the expansion of the customer base. Therefore, there would be a connection to taxable activities.
It also pointed out that the VAT Act does not impose on taxpayers the prices they should apply in order not to lose the right to deduct the entire input VAT, if transactions are concluded with unrelated entities. To support its position, the foundation referred to many individual interpretations, including those from April 20, 2017 (ref. no. 1061-IPTPP3.4512.77.2017.2.ALN) and August 14, 2020 (ref. no. 0113-KDIPT1-2.4012.372.2020.2.AM).
The KIS director also agreed to deduct the entire VAT paid. He confirmed that the foundation's expenses would be related to taxable activities and it does not matter that in the initial period it will apply promotional prices for its services.
"The taxpayer has the right to freely arrange his interests so that his economic activity is profitable, including applying significant price discounts if it is deemed appropriate to achieve this goal," the authority said.
He only emphasized that the promotion must be properly documented, so the taxpayer must have evidence that clearly indicates to which recipients and under what circumstances he granted the discount. ©℗
Legal basis
Individual interpretation of the director of KIS of March 9, 2023, ref. no. 0114-KDIP4-1.4012.20.2023.1.DP.