Introduced in the second half of 2019, the exemption from taxation for persons under the age of 26, i.e. the tax exemption available under Article 21(1)(148) of the PIT Act, which in its assumptions was intended to facilitate young taxpayers’ entry into the labour market – will not apply to all young taxpayers. This group excludes, inter alia, soccer players under contracts and referees providing services on the basis of contracts of mandate.

Pursuant to Art. 21 section 1 point 148 of the PIT Act, income from employment relationship, co-operative employment relationship and mandate contracts, referred to in Art. 13 point 8 of the PIT Act, earned by a taxpayer up to the age of 26 is exempt from income tax up to the amount not exceeding PLN 85,528 in a fiscal year. The said exemption is subjective and objective in nature, which first of all refers to income tax payers who are under 26 years of age. However, not all incomes earned by young taxpayers will benefit from the above exemption due to the fact that the exemption refers only to enumerated situations in Article 21 Section 1 point 148 of the PIT Act. Therefore, the possibility of taking advantage of the exemption depends on the fulfilment of all of the above-mentioned conditions, which are necessary for its application.

As a rule, players’ contracts are governed by the regulations of the Polish Football Association and based on the provisions of the Civil Code. At the same time, the current position of the authorities, contained in official letters, indicates that a contract for professional football is in fact a contract for the provision of sports services, and thus has only the nature of a contract of mandate.

This position was taken, inter alia, by the Director of National Fiscal Information in an individual interpretation dated 5 March 2021, ref. 0115-KDIT2.401.866.2020.HD, indicating that young sportsmen and sportswomen obtain revenue from a different source, i.e. from professional sports activities under Article 13 point 2 of the PIT Act, and not from contracts of mandate. As a result, in the opinion of the authority in question, the contract for professional soccer is in fact a contract for the provision of sports services, and therefore it only has the nature of a contract of mandate.

The above fact is a consequence of recognizing that the subject of the above contract is not the result, but careful operation, under the conditions and in the manner specified in the contract and internal regulations specified by the football club. Due to this fact, the Authority assumed that the contract for professional football practicing is a contract for the provision of sports services, the nature of which is similar to the contract of mandate. This is also due to the fact that, among the revenues from activities performed in person, the revenues from practicing sports in Art. 13 point 2 of the PIT Act, as a result of which it is not possible to include the players’ revenues as revenues from contracts of mandate referred to in Art. 13 point 8 of the PIT Act.

As a result of this qualification of the players’ income, the tax exemption referred to in Art. 21 par. 1 point 148 of the PIT Act does not apply to salaries and wages earned on personally-performed activity in respect of sports for taxpayers under the age of 26. As a result, the club, as the payer, is obliged to calculate, deduct and remit to the tax office the advance income tax on the earned remuneration.