The Supreme Administrative Court's decision issued on February 14 2016 in Warsaw has put to and end our client's 3 years' battle around ensuring the entitlement for free of charge transport to employees.
A company represented by JP Weber put forward a request for a binding tax interpretation with regard to doubts about whether, in a situation where the employer ensures transport to the place of work to its staff – but also potential candidates for posts as well as employees of companies cooperating with it – income is generated to the benefit of the said employees, taxable under the regulations of the PIT law (in line with the provisions in force until December 31 2014). Due to the initially issued unfavourable interpretation, the case went to the administrative court, where a decision favourable to our client was made. The Provincial Administrative Court in Wrocław pronounced that as for the value of benefits in kind and other free of charge benefits for the employee, to deem taxable income generated, the benefit should be de facto obtained by the employee (as opposed to being left at their disposal). Additionally, its value should be specified and determinable. Therefore, if the employer offers its employees a possibility of using transport to and from their workplace (collective employee transport), it cannot be deemed that as soon as then the employee receives income arising from the free of charge benefit.
The Provincial Administrative Court's decision was opposed by the Minister of Finance, who submitted a revocation appeal relating to the said ruling. In the appeal, the representatives of the tax authority sustained the proposition about the need to establish the amount of an employee's income also in circumstances where it is not possible to precisely determine its value per particular members of staff. This standpoint, none the less, has now been opposed by the Supreme Administrative Court by fully dismissing the appeal. The court emphasised, as the Provincial Administrative Court in Wrocław previously had, that if income arising from free of charge transport is to be deemed generated, the benefit must be de facto received (as opposed to being left at the employee's disposal). An additional condition to be met for such income to be generated is a possibility of determining the value of such a benefit and assigning it to each employee.