The ultimate Administrative Court (NSA) issued a judgement that could change the approach to taxing taxi toll refunds for business purposes. This decision, although favourable to employees, leaves many questions unanswered due to the different position of the Ministry of Finance. The interpretative conflict increases the hazard of disputes with tax, which could affect hundreds of companies and employees in Poland in the future.
NSA judgment: reimbursement of taxi costs is not income
The November 2024 NSA ruling refers to the explanation of the manager of National taxation Information (KIS) of April 2021. At the time, the manager of KIS considered that the reimbursement of costs for taxis should be treated as taxable income on individuals (PIT).
This position was not accepted by a medical company which argued that the expenses incurred are purely for the performance of the employer's duties and do not constitute a property benefit for employees. The NSA has agreed to this position, considering that returns cannot be treated as worker income because:
- There is no enrichment of the employee. The reimbursement only compensates for the expenses incurred in carrying out the service tasks.
- The intent of the expenditure is solely related to the interests of the employer. The worker does not receive any additional assets.
Reimbursements should not be treated as worker income. The reason is simple: the worker has no property benefit. This is just a compensation of the costs incurred, which are essential for the performance of the business order, alternatively than a property delivery.
Ministry of Finance: analysis of each case
The NSA judgment, although relevant, only concerns a peculiar case and does not constitute a binding explanation for all akin cases. The Ministry of Finance, as the diary of the Gazette of Laws notes, emphasises in its explanation the request for an individual analysis of each case of reimbursement.
Deputy Minister of Finance Jarosław Neneman, in consequence to a parliamentary hearing, stated: "In the opinion of the Ministry of Finance, any reimbursement of expenditure requires a separate analysis of the taxation consequences it gives birth, which is due to the dynamics of socio-economic relations, including in the employer-employee relationship."
No binding general interpretation
Despite the expanding number of disputes concerning the taxation of transport reimbursements, The Ministry of Finance does not plan a binding general explanation in this case. The deficiency of precise guidelines makes both employers and employees susceptible to taxation checks and proceedings.
Piotr Juszczyk points out the problematic situation in which economical operators find themselves: “The deficiency of clear regulation means that in practice workers and employers stay without effective protection from tax. They are exposed to a dispute with officials, judicial trial and possible penalties.”
Future prospects: chaos or stability?
The NSA ruling opens the way to change the approach to taxing travel reimbursements by taxi, but at the same time exposes explanation chaos in Polish taxation law. Without clear guidance from the Ministry of Finance or the amendment of the rules, the hazard of disputes with the taxation will stay high. For employers and workers, this means that peculiar care is needed erstwhile accounting for akin expenditure.
Will the Ministry of Finance decide to give a general explanation or change the rules in the face of an expanding number of processes? This question remains open, and the answer to it can find the form of the taxation relation between employees and employers in Poland in the coming years.
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The NSA issued a judgement on the reimbursement of taxi expenses for business purposes. MF does not accept its content
