Travel by non-employees: quasi-business travel


In the past few months, the Director of National Fiscal Information has been issuing individual tax law interpretations which include a taxpayer-unfriendly interpretation of ‘travel by non- employees’ in the context of the taxation of benefits granted on this basis (Art. 21.1.16.b of the Personal Income Tax Act). According to these interpretations, this term includes travel with the features of an employee’s business travel, i.e. made incidentally to perform a specific task outside of the locality where the employer is established or outside of the location where tasks are regularly performed. This, in turn, leads to the conclusion that 'travel by non-employees' cannot include travel for the purposes of performing a task that is clearly specified in the contract. As a consequence, tax breaks should not be available to persons who are not employees and who perform more or less regular travel in connection with the performance of contractual services for an entity who covers the costs of such travel. According to the new interpretations, per diem allowances and other sums paid to such individuals on account of the travel constitute taxable income.


Two years ago the term of “travel by non- employees” was explained by the Supreme Administrative Court. The Court pointed out that in the case of non-employee travel, the term used is just 'travel' (podróż), and not 'business travel' (podróż służbowa). This means that the scope of the exemption has not been limited to business travel within the meaning of Article 77(5).1 of the Labor Code, but it applies to all travel by non-employees. The Court also ruled that the meaning of 'travel’ under the provision in question cannot be extended beyond the actual physical movement of the delegated individual to encompass the performance of the objective of the travel. In consequence, the tax exemption can be used (naturally, within the limits imposed by specific laws) towards expenses on travel, hotel rooms and per diem allowances of non-employees. There is a similar decision in a ruling of December 2017, where it is clearly stated that the notion of 'travel' should not be identified with 'business travel’, which is defined in the Labor Code. Thus, it is difficult to agree with the restrictive view of the Director of National Fiscal Information according to which the tax exemption is available only to those non-employees whose travel has characteristics of an employee’s business travel.