Non-cash prizes with logos for employees awarded as part of competitions and integration meetings – what are the PIT implications?

November 25, 2024

In a recent interpretation issued on August 29, 2024 0112-KDIL2-1.4011.619.2024.1.DJ, the Director of KIS indicated that non-cash prizes received by company employees as part of a gamification project, bearing the company’s logo, may constitute employee income from employment.

What was the purpose of giving non-cash prizes?

The company stated in its application that the aim of introducing the gamification project was to motivate employees to achieve higher productivity and additional engagement at work. Employees can exchange points earned within the project for company-branded gadgets such as lanyards, keychains, pens, bottles, and belt bags.

Promotional gadgets as taxable income

Any potential income from non-cash benefits in employment should be assessed in light of the Constitutional Tribunal’s ruling of July 8, 2014 (case reference K 7/13). In this case, the Director of KIS pointed out that employees receive prizes for work achievements, which makes them part of their remuneration. Additionally, according to the authority, these prizes have a tangible financial value and will provide employees with a material benefit. Furthermore, they are accepted with the employees’ consent since they voluntarily decided to participate in the project. As a result, according to the authority, all criteria from the aforementioned Tribunal ruling are met, and the employees receive income.

Logoed non-cash prizes but not income?

The Director of KIS presented a different view in the interpretation issued on December 6, 2023 0115-KDIT2.4011.470.2023.1.MM, concerning the distribution of non-cash prizes with logos as part of marketing and promotional campaigns. In this case, the company distributed logo-branded gadgets to employees not for work performance but in connection with the organization of integration, training, promotional, and other similar meetings aimed at advertising and promoting the company. The distribution of these gadgets was primarily in the company’s interest, and the criteria from the Tribunal ruling were not met, meaning no employee income arises.

Interpretation depends on the purpose of using promotional gadgets

Therefore, the conclusion is as follows: if non-cash prizes are awarded as part of a competition for work performance and the criteria from the Tribunal ruling are met, they constitute income. However, if they are distributed as part of promotional, integration, or similar campaigns (i.e., in the employer’s interest), they do not constitute income.

Confirmation of the interpretation by the Director of KIS

This is fully confirmed by the interpretation of June 7, 2024 0112-KDWL.4011.34.2024.1.TW. where the Director of KIS confirmed that gadgets received by employees during meetings, training, corporate events, and marketing campaigns do not constitute income for employees, as there is no benefit on their part. It cannot be assumed that employees would spend money to purchase these gadgets if they had not received them. On the other hand, gadgets awarded as competition prizes will constitute income, as they are accepted with the consent of the contest participant, in their interest, and provide a tangible financial benefit. Thus, the conditions for the creation of income from non-cash benefits, as per the Tribunal ruling, are met.

Tags gadżety reklamowe, PIT, promotional gadgets, przychód podlegający opodatkowaniu, taxable income