In accordance with Article 22, paragraph 1 of the Personal Income Tax Act, the costs of obtaining revenues are expenses incurred in order to earn revenues or to maintain or secure the source of revenues, with the exception of expenses listed in Article 23 of that Act.

In the context of spending on a dog, it is important that there is a direct link between the cost incurred and the business activity being conducted.

Application examples:

1. Guarding function of a dog:

   • Company property protection: Expenses for a dog that serves a protective function, such as a guard dog, may be considered a business expense. For example, if the dog protects an accounting firm from potential theft of documents or equipment, the costs of purchasing, training, feeding, and veterinary care may be considered legitimate business expenses.

2. Using a dog in marketing activities:

   • Promotion of products or services: In a situation where a dog is used in marketing activities, such as advertising or promoting pet products, the costs of keeping the dog may be considered a cost of earning income. An example would be a dog food company that uses its own dog in promotional materials.

Conditions for recognizing expenses for a dog as tax deductible costs:

1. Connection with business activity : Expenditures must be directly related to the business activity and incurred in order to generate, secure or maintain a source of income.

2. Dog function : The most commonly accepted expenses are for dogs that perform guard functions, protecting company property from theft or damage.
   

3. Appropriate documentation : It is necessary to have documentation proving the expenses incurred, such as invoices for the purchase of the dog, training, food or veterinary care.

4. Use of a dog in business : If the business is conducted at the place of residence, the expenses for the dog may be included in the costs of obtaining income in proportion to the degree to which it is used in the business activity.

Documentation requirements:

In order for the expenses for a dog to be included in the costs of obtaining income, they must be properly documented. You must have invoices or receipts confirming the expenses incurred for the purchase, training, food and veterinary care. Additionally, it is worth preparing documentation indicating the connection of the dog with the conducted business activity, such as contracts, photos or promotional materials.

Legal bases and interpretations:

Example 1: Guard dog in an accounting office

In an individual interpretation dated April 7, 2022 (ref. 0114-KDIP2-2.4010.335.2024.2.PK), the Director of the National Revenue Information considered the situation of an accounting office that purchased a dog to protect documents and computer equipment stored at the company’s headquarters. The entrepreneur argued that the dog performs a protective function, securing the company’s property against theft or destruction. The tax authority considered that the expenses for the purchase and maintenance of a dog, such as food, veterinary care or training, can be included in tax-deductible costs, provided that the dog is used exclusively in business activities and does not serve private purposes.

Example 2: A guard dog at the entrepreneur’s place of residence

In an individual interpretation of August 28, 2024 (ref. 0113-KDIPT2-1.4011.505.2024.2.HJ), the Director of the National Revenue Information analyzed the situation of an entrepreneur conducting business activity at the place of residence. The entrepreneur had a guard dog, which was supposed to protect both private and company property, including documents and computer equipment related to the activity. The tax authority stated that in such a case, the expenses for maintaining the dog can be included in the costs of obtaining income, but only in the part proportional to the use of the dog in the business activity. This requires appropriate documentation and determination of the extent to which the dog is used for company purposes.

Summary:

Case law and tax interpretations indicate that expenses for the purchase and maintenance of a dog may be recognized as costs of obtaining income if there is a direct connection between owning a dog and the business activity conducted. This is particularly true when the dog serves as a protection for company property. In the event that the dog is used for both private and business purposes, it is necessary to account for the expenses proportionally and to document them appropriately. Each case should be analyzed individually, taking into account the specifics of the business activity conducted and the function that the dog performs in the company.