Polish Olympians who won medals at the Olympic Games in Paris can enjoy sporting achievements, but they are expected to have an unpleasant surprise associated with taxes. Although cash prizes are exempt from income tax, material prizes, specified as housing or cars, will no longer be as pleasant in reception. All due to 1 seemingly insignificant mistake in the PIT Act, which could cost athletes quite a few money.
Error in the Act – How 1 Word Can Change Everything
Article 21 of the individual Income taxation Act (PIT) states that “the prizes paid by the Polish Olympic Committee (...) for obtaining results at the Olympic Games”. The key word that has caused all the confusion is “payed”. This provision excludes any material rewards which are not "payed out" but "delivered". This means that any in-kind prizes that the Olympic people receive will be subject to taxation, even though the intention of the legislature might be different.
Tax on Material Awards – costly flat for Medal
An example that best illustrates this problem is the situation of the gold medalist in sports climbing, Aleksandra Mirosław. She received an flat from her sponsor, which in explanation is simply a large reward. However, according to the explanation of the manager of National taxation Information, she will gotta pay income taxation on the value of the apartment, unless the sponsor decides to cover this cost himself. A akin situation applies to another medalists specified as Claudia Zwolińska, Daria Pikulik and Julia Sheremeta, who besides received housing as awards.
How the Sponsor’s Act Consists in Costs
Some sponsors, in order to avoid the imposition of additional costs on athletes, decide to taxation the prize, i.e. to add an additional amount of money to it to cover the taxation due. However, this is the individual decision of the sponsor and this is not a standard practice. For athletes, this means additional worries and uncertainty about whether they will gotta pay a advanced taxation out of their own pocket.
What's next? Will the legislator correct his mistake?
The current situation is simply a consequence of ambiguity in taxation law, which should be updated as shortly as possible. Olympic medalists, who worked hard for their successes, should not be additionally charged financially due to inaccurate provisions in the bill. Clarification of the rules and amendment of the wording in the PIT Act could solve this problem, but by then athletes gotta pay taxation on material prizes.
While athletes should be rewarded for their achievements on the global stage, the current rules let them to face the request to give part of their prize to the fiscal. The legislator, hopefully, will announcement his mistake and make appropriate changes, which will let Polish medalists to enjoy their earned prizes fully.
Continued here:
The taxation Office took on Polish Olympians. They'll gotta pay for the prizes.
