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In-kind donations by entrepreneurs for Ukrainian refugees and taxation

In connection with the armed conflict in Ukraine and the increased assistance provided by Polish people, the Polish government has prepared various forms of support for both Polish entrepreneurs and individuals. For example, the 0% VAT rate may be applied to entrepreneurs who have supplied goods or services in order to help Ukrainian citizens.


Pursuant to the Ordinance of the Minister of Finance of 3rd March 2022 amending the Regulation on goods and services for which the rate of VAT on goods and services is reduced and the conditions for applying reduced rates (hereinafter: the Regulation), a zero VAT rate has been introduced for purposes related to assistance for Ukrainian citizens that are the result of warfare. The provisions of the Regulation are to be in force until 30th June 2022.

In accordance with the Regulation, the zero rate will apply to the supply of goods, i.e. transfer of goods belonging to his enterprise free of charge by the taxpayer, in particular any other gifts of goods (Article 7 section 2 point 2 of the VAT Act) made exclusively to the Government Strategic Reserve Agency, medical entities (e.g. independent public health care centers, research institutes referred to in Article 3 of the Act of 30 April 2010 on research institutes or military units), local government units. Moreover, the provision of services consisting in the use of goods that are part of an enterprise and any other gratuitous provision to the designated institutions for the purpose of assistance to victims of war in the territory of Ukraine (Article 8 section 2 of the VAT Act) will also be able to benefit from the zero rate.

It should be added that the 0% rate is valid until 30th June 2022. However, in the case of supplies and provision of services made prior to the entry into force of the Regulation, i.e. prior to 4th March 2022, a taxpayer may benefit from 0% VAT only if a written agreement referred to below is concluded (this applies to the period from 24th February 2022 to 4th March 2022).

Conditions for benefiting from a zero VAT rate

In order to benefit from the reduced VAT rate, the taxpayer must conclude a contract with the aforementioned entities. At the same time, the agreement should indicate that the donated goods or services will be used for the purposes related to assistance for victims of the consequences of warfare in Ukraine.

Another condition is that the taxpayer and the entity confirm in writing that the supply of goods or provision of a particular service actually took place.

Union goods

It is worth remembering that if you make an in-kind donation of EU humanitarian goods, they may be transported across the border in a certain manner. For example, goods with a value of up to EUR 1.000 should be declared for the export procedure verbally at the border customs office. However, for goods with a value of more than EUR 1.000, the taxpayer will be able to use two solutions, i.e. the taxpayer may use a special form for crossing the Polish-Ukrainian border for humanitarian aid truck transport (which is available at or may make an electronic declaration for the export procedure submitted to AES/ECS2.

To sum up, the introduced Regulation entitles to apply the 0% VAT rate to all free-of-charge supplies of goods and provision of services offered for the purposes related to assistance for victims resulting from the conflict in Ukraine. At the same time, it should be noted that the material scope of the preference is open, so the taxpayer should individually verify whether he will be entitled to apply the rate in the case in question.

As Deputy Finance Minister Artur Soboń said: “The Regulation concerning the 0% VAT rate in the case of material aid is a gesture to those citizens of our country who are not indifferent to the needs of those affected by the warfare in Ukraine. It is also a signal from our side that supporting those is need always makes sense. It is a contribution which are making in these difficult times to show that being, the zero VAT rate will be in force until 30 June 2022. However, we do not exclude the possibility of extending this deadline. We also do not exclude the possibility of extending the preferences. Both of these issues are subject to developments, which we are monitoring closely”.


Referring to income tax, it should be first of all indicate that the premises and rules for taking advantage of tax preferences are different than those indicated above for VAT.

Entrepreneurs who are PIT and CIT taxpayers have the possibility to recognize the value of donations as tax deductible costs. A specific tax preference was introduced to the tax system in Article 38w section 1 of the Corporate Income Tax Act (hereinafter: the CIT Act) and analogically in Article 52zf of the Personal Income Tax Act (hereinafter: the PIT Act).

It should be noted that before the entry into force of regulations introducing tax preferences for entitles supporting as a result of the armed conflict in Ukraine, it was not possible to include donations for the benefit of assistance in tax deductible costs. Provisions of Article 23 section 1 point 11 of the PIT Act and Article 16 section 1 point 14 of the CIT Act were used to derive relevant restrictions. The exception was expenses incurred on the production of foods products, which were then transferred to public, which were then transferred to public benefit organizations. The current legislation provides support for entities offering their material and financial assistance to Ukraine and its residents. It should be emphasized that the newly introduced tax preference differs from the typical practice of including expenses in tax costs. In fact, according to be considered a tax deductible cost, it must be: (i) incurred to earn revenue or (ii) serve to preserve or secure a source of revenue.

However, in order to qualify a given expense as a tax deductible cost, it is necessary to fulfil certain conditions. It should be emphasized here that in order to be entitles to deduct a donation from income, the donation should be made to:

  1. organizations referred to in Article 4 section 2 and 3 of the Act on Public Benefit Activity and Volunteerism,
  2. local government units,
  3. Government Strategic Reserve Agency,
  4. Entities performing in Poland or on the territory of Ukraine medical activity or activity in the field of medical rescue.

Consequently, by the entity providing individual assistance, i.e. directly to an inhabitant of Ukraine, will not be able to include the donation in tax deductible costs. This is because there is a closed catalogue determining the possibility of including expenses for specific entities.

Moreover, according to the current Article 38w section 1 of the CIT Act (Article 52zf of the PIT Act), the tax deductible costs are the costs of production or the purchase price of things or rights being the subject of donations made in the period from 24 February 2022 to 31 December 2022 for the purposes of counteracting the effects of warfare on the territory of Ukraine. Consequently, in order for the taxpayer to be able to recognize the entrusted support as an expense, it should donate it within the aforementioned period for the purpose specified above. This purpose, which also cannot be ignored, is formulated differently than in VAT and is also not defined. What is striking at first sight with both regulations is that they do not (probably) cover military assistance. However, this is difficult to determine at this stage, as both income tax and VAT give no indication as to how these regulations are to be interpreted.

Another important condition is also that costs may only be taken into account if they have not previously been included in deductible costs, including through depreciation write-offs.


Taking into account the tax preferences presented above, an entrepreneur wishing to provide support for Ukraine should analyze in advance , whether the support it provides will be able to benefit from the preferences proposed by the government. There is no doubt that transferring the support to an entity other than those indicated in the catalogue will exclude the possibility of recognizing a given support as a cost. On the other hand, with regard to VAT and the possibility to apply the 0% rate, it is necessary to conclude an agreement with the above-mentioned entities (which without a legal obligation is also worth doing for the purposes of applying preferences in PIT and CIT). Therefore, we recommend that the entrepreneur, before providing support, should analyze relevant regulations, which may potentially reward the support provided. It should also be remembered that although both regulations are effective from the beginning of the war (24th February 2022) they also have, different, end dates.