The state has implemented a provision which allows creative artists to deduct 50% of their income from their creative work as expenses for income tax purposes. Tax-payers whose income from creative work exceeds the so called first tax threshold (85 528 PLN of income, after deduction of premiums paid to the pension scheme and health insurance) are not be able to benefit from the 50% deduction.
According to amendments made to the Income Tax Act (1993, amendments 2003), deductions of up to 10% are available on donations made by legal persons (organisations, foundations etc.) for “public good purposes”. In the case of private persons/individuals, a ceiling of 6% of income has been introduced. Since 1991, state cultural institutions are allowed to receive private donations from individuals or legal persons.
The following tax exemptions are made available for NGO’s – including both foundations and associations: goods and services tax (1993); the tax on increase of remuneration within the framework of statutory activities (1992); property tax which exists within the framework of statutory activities (1991). Foundations are also exempt from paying court fees when registering.
Law on Income Tax on Individuals allows an individual to deduct 1% of their income tax as a donation for a chosen public organisation. Starting from the tax year of 2007, tax-payers do not transfer the donations directly to the beneficiaries, but instead pay through the tax revenue offices. That simplifies the procedure.
According to Act on tax on goods and services of March 11, 2004:
- cultural institutions are exempt from VAT;
- there is reduced 5% VAT on the sale of books, periodicals and ebooks;
- a 22% VAT is applicable to the sale of CD’s.
According to widespread opinion, the tax changes in Poland do not encourage sponsors and donors to adequately support culture. Transparency and new solutions or measures are being called for.