B2B Contractors at Corporate Events Are Not Necessarily “Outsiders” for VAT Deduction

Summary

• The Director of National Tax Information has reportedly confirmed, following proceedings before the Supreme Administrative Court of Poland, that businesses may deduct input VAT on corporate integration events attended by employees and genuine B2B contractors where the event serves a demonstrable business purpose.
• Full VAT deduction depends heavily on the contractual arrangements, the description of the purchased service and the supporting evidence. The company should purchase a comprehensive event-organisation service rather than separately documented catering, accommodation or entertainment services subject to specific VAT deduction restrictions.
• Businesses should document why integrating employees and B2B contractors supports their taxable operations, particularly where both groups work together in hybrid project teams. A poorly worded invoice or a separate catering line may jeopardise the deduction even where the event itself has a legitimate business objective.

Extended article

A B2B contractor participating in a company integration event should not automatically be treated as an “external person” whose attendance prevents the company from deducting input VAT.

That is the practical conclusion emerging from an October 2026 individual interpretation reportedly issued by the Director of National Tax Information, following proceedings before the Supreme Administrative Court of Poland, known as the NSA.

The interpretation is particularly relevant for technology companies, consulting businesses and other organisations operating with hybrid teams consisting of employees and self-employed specialists. In these environments, programmers, project managers and other B2B contractors may perform their work alongside employees, use the same project-management structures and contribute to the same customer deliverables.

The decisive question is therefore not simply whether an attendee is employed under an employment contract. The more important issue is whether the expense has an objective and documented connection with the company’s taxable business activities.

Earlier Polish case law had already distinguished between events serving predominantly private or recreational purposes and integration activities linked to the employer’s business. In one line of cases, courts accepted that expenditure relating to genuine business collaborators may support taxable operations, while benefits provided mainly for participants’ personal enjoyment may fall outside the right to deduct. [gtakademia.pl]

B2B contractors are not automatically unrelated third parties

The tax authorities have historically taken a restrictive approach where corporate events involved persons other than employees. Contractors, family members and accompanying persons could be characterised as external participants whose presence served private rather than business purposes.

That analysis is increasingly difficult to sustain for genuine B2B contractors who operate as part of the company’s delivery model.

A programmer engaged through a B2B contract may work daily with employed programmers, participate in the same development projects and be subject to the same operational deadlines. Building cooperation, communication and trust within that mixed team can therefore serve a direct commercial purpose.

The company must nevertheless demonstrate this connection. Simply labelling an event as “integration” will not be sufficient if its programme, participant list and documentation suggest that the expenditure primarily financed recreation or personal consumption.

Four conditions supporting full VAT deduction

Businesses seeking to deduct VAT should pay particular attention to four practical conditions.

1. A genuine connection with taxable business activities

The company should demonstrate that the event supports activities giving rise to a VAT deduction. The business rationale might include:

• improving cooperation between employees and contractors;
• integrating hybrid or geographically dispersed project teams;
• reducing communication failures;
• improving the delivery of customer projects;
• strengthening knowledge sharing;
• onboarding new team members; or
• supporting organisational or technological change.

The explanation should be specific to the company’s operating model. General statements about improving morale or offering an employee benefit may not establish a sufficiently strong relationship with taxable activities.

2. Participants must have an identifiable business relationship with the company

The attendance list should distinguish employees and genuine business collaborators from family members, partners, former employees and other guests.

For B2B contractors, the company should be able to demonstrate:

• an active services agreement;
• participation in company projects;
• regular cooperation with employees or other contractors;
• a role within the relevant operational team; and
• a business reason for attending the event.

The presence of persons with no meaningful relationship to the company’s activities may require an allocation of the costs or may undermine the argument that the event was organised for business purposes.

3. The contract should cover a comprehensive event service

Where possible, the agreement with the organiser should describe a single, comprehensive service covering the organisation and delivery of the corporate event.

The scope may include venue management, logistics, coordination, technical support, programme preparation, meals and other elements necessary to deliver the event. The wording should reflect the actual commercial arrangement and should not artificially combine independent services.

This distinction matters because Polish VAT legislation restricts input VAT deduction for certain purchased services, particularly accommodation and catering. A company may consequently face a different VAT result when it buys a comprehensive event-organisation service than when it purchases catering or hotel services directly.

4. The invoice must accurately reflect the purchased service

The invoice should be consistent with the contract and the service actually supplied.

Where the business has purchased a comprehensive event-organisation service, the invoice should describe that overall service clearly. It should not misleadingly reduce the transaction to “catering”, “accommodation” or another separately restricted item.

A problematic invoice description or an inappropriate breakdown of individual components may lead the tax authorities to assess each element separately. In particular, separately invoiced catering may fall within Poland’s restriction on deducting VAT from catering services.

The invoice description alone cannot change the true nature of the transaction. However, inconsistencies between the contract, invoice, event programme and actual services make the VAT position considerably more difficult to defend.

Why one invoice item can affect the deduction

One of the most important practical lessons concerns the treatment of individual components appearing on the supplier’s invoice.

If an event organiser invoices one comprehensive event-management service and the additional components are ancillary to that service, the company may have an argument for deducting the VAT on the complete supply. The position depends on the economic substance of the transaction and the relevant facts.

By contrast, if the invoice contains a separate line for catering, that item may be treated as a distinct catering service. The specific restriction applicable to restaurant and catering services could then prevent deduction of the VAT attributable to that line.

The same risk arises where the company contracts directly with several suppliers, such as a hotel, restaurant and entertainment provider. Each purchase may have to be assessed separately rather than as part of one comprehensive event service.

Businesses should not ask suppliers to use inaccurate descriptions merely to obtain a more favourable VAT result. The contract and invoice must faithfully represent what was actually purchased. The practical objective is consistency and correct classification, not relabelling.

Demonstrating the purpose of integrating hybrid teams

Companies using mixed employment and B2B models should prepare a short business justification before approving the event.

The documentation could explain that employees and contractors:

• jointly deliver the same customer or internal projects;
• use integrated workflows and project-management systems;
• depend on each other’s technical or operational input;
• work remotely or from different locations;
• require effective escalation and communication channels; and
• collectively contribute to the company’s taxable supplies.

The event programme should reinforce this explanation. Workshops, project reviews, knowledge-sharing sessions, planning activities and structured team exercises can provide stronger evidence of a business purpose than an agenda consisting exclusively of meals, leisure and entertainment.

This does not mean that every minute of the event must involve formal training. Social and recreational elements may support team integration. However, the overall evidence should demonstrate that the company organised the event in its own commercial interest rather than primarily to satisfy the personal needs of attendees.

Recommended instruction for finance and tax teams

Before deducting VAT on an integration event involving B2B contractors, the finance team should verify that:

• the event has a documented business objective;
• contractors attending the event actively support the company’s operations;
• accompanying persons and other private guests are excluded or separately identified;
• the supplier agreement correctly describes the purchased service;
• the invoice matches the agreement and the economic substance;
• restricted services such as catering or accommodation have been identified;
• any required allocation between deductible and non-deductible expenditure has been performed; and
• the company retains the programme, participant list, approvals and supporting business justification.

The interpretation offers a potentially important clarification for modern workforce models. It indicates that the tax analysis should reflect how the business actually operates rather than relying solely on the legal form under which each team member performs their work.

However, it should not be understood as an automatic entitlement to deduct all VAT incurred on corporate events. The result remains dependent on the facts, the business rationale, the identity of the participants and, critically, the contractual and invoicing documentation.

Further reading: Analysis of Polish VAT deduction for integration events involving employees and business collaborators.

---

---