Will the youth tax relief apply to sponsorship agreements?

Definition of relief for young people

The relief for young people allows you to benefit from income tax exemption up to the amount of PLN 85,528 in a tax year. In practice, this amount is increased accordingly by PLN 30,000 of the tax-free amount on the tax scale, then it effectively amounts to PLN 115,528. Moreover, in the case of a person who continues education, it will also be possible to benefit from exemption from social security contributions and health insurance contributions.

Sponsorship agreement and relief for young people

The taxpayer asked the National Tax Information (KIS) regarding the sponsorship agreement. He intended to conclude an agreement with a young athlete who would meet the criteria for youth relief, but the sponsorship agreement was not listed in the catalog of sources of income eligible for relief. The applicant argued that the sponsorship agreement, despite the lack of direct inclusion in the catalog of sources of income entitling to a discount for young people, may be treated as an innominate agreement. In his reasoning, such a contract could be subject to the provisions on mandate in accordance with Art. 750 of the Civil Code. This article states that the provisions on mandate shall apply mutatis mutandis to contracts for the provision of services that are not regulated by other provisions.

In practice, this would mean that a sponsorship agreement could be interpreted as a mandate contract, where the taxpayer (principal) transfers funds to the athlete (contractor) in exchange for specific promotional benefits.

Importantly, mandate contracts are included in a closed catalog of sources of income entitling to youth tax relief, which would mean that if a sponsorship contract is recognized as a mandate contract, an athlete who meets the conditions for youth tax relief could benefit from preferential tax conditions.

KIS interpretation on the sponsorship agreement

The Director of the National Tax Information supported this position in the interpretation issued on October 10, 2023 (reference number 0114-KDIP3-2.4011.672.2023.2.MN). It recognized the sponsorship agreement as an innominate contract, which allows the applicant to benefit from the youth tax relief. As a result, a young athlete, being a student under 26 years of age, could benefit from preferential tax conditions in connection with the concluded sponsorship agreement, even though it is not directly mentioned in the catalog of sources of income entitling to the relief.