Coffee, tea and water as business expenses in Poland – 2026 guide

Businesses regularly buy food products such as coffee, tea, water, milk or sugar for their employees. Classifying these expenses correctly in the books, however, often causes difficulties. Can these expenses be treated as tax-deductible costs? How do you tell them apart from entertainment costs (koszty reprezentacji)? What are the employer's obligations to provide drinks to employees? In this article we look in detail at every aspect of accounting for coffee, tea and water in a company.

Legal basis for tax-deductible costs

Under Article 22 section 1 of the PIT Act (personal income tax), tax-deductible costs are costs incurred to earn revenue or to maintain or secure a source of revenue, except for the costs listed in Article 23. This fundamental provision means that for an expense to be treated as a tax-deductible cost, it must have a cause-and-effect link with the revenue earned.

Proper documentation of all expenses is also key. Without adequate documentation, even economically justified costs cannot be treated as tax-deductible costs. Documentation should be complete, reliable and allow the nature of the expense and its connection with the business to be identified clearly.

In their rulings, the tax authorities describe tax-deductible costs as any rational and economically justified expenses connected with the business. Importantly, Article 23 of the Act does not expressly exclude expenses on food products for employees from tax-deductible costs – Article 23 section 1 point 23 excludes the purchase of food and drinks only where it is an entertainment cost. How these provisions apply to coffee, tea and water is explained in rulings issued by the tax authorities.

Distinguishing entertainment costs from ordinary business costs

One of the most important aspects of accounting correctly for coffee, tea and water is telling them apart from entertainment costs. Under Article 23 section 1 point 23 of the PIT Act, entertainment costs are excluded from tax-deductible costs, which means they cannot be deducted from the tax base.

Entertainment costs are characterised above all by lavishness and ostentation. They are expenses on organising receptions, banquets, expensive meals or exclusive business events. Buying basic food products such as coffee, tea or water is not lavish or ostentatious, so it should not be treated as an entertainment cost.

The key differences between entertainment costs and ordinary business costs include:

Expenses on coffee, tea and water for employees are most often an established custom in the company and serve the team's day-to-day functioning. They have no prestige or image purpose but a practical one – they are meant to meet employees' basic needs while they perform their duties.

Employer's obligations to provide drinks

Occupational health and safety rules impose specific obligations on employers to give employees access to drinks. Under § 112 of the regulation on general occupational health and safety rules, the employer must provide all employees with drinking water or other drinks, and their quantity, type and temperature should be adapted to the working conditions and the employees' physiological needs.

The rules do not specify particular drinks to be provided to employees (detailed rules apply only to work in particularly arduous conditions, for example in high or low temperatures). This means that the choice of drinks is up to the employer, who can take into account the team's needs, the nature of the work and the company's financial means. It may be plain drinking water, but also tea, coffee or other soft drinks.

This flexibility in choosing the type of drinks allows employers to adapt what they offer to employees' preferences and the nature of the work. In offices, coffee and tea are often chosen as they also help people stay focused, while in production plants the priority may be to provide plenty of drinking water.

Meeting the obligation to provide drinks to employees directly affects:

• The team's productivity
• Employee satisfaction and motivation
• Compliance with health and safety rules
• The company's image as a responsible employer

Expenses on drinks for employees as tax-deductible costs

Expenses on coffee, tea and water for employees can be treated as tax-deductible costs, provided certain criteria are met. The key is to show a cause-and-effect link between the expense incurred and the revenue earned.

This link can be justified in several ways:

1. Meeting health and safety obligations - Providing drinks to employees is an employer's obligation under occupational health and safety rules
2. Effect on productivity - Access to drinks has a positive effect on comfort and efficiency at work
3. Employee motivation - Looking after the team's basic needs increases employee satisfaction and loyalty
4. Industry custom - In most companies, providing basic drinks is standard

To account for these expenses correctly, the following conditions must be met:

1. Proper documentation - Every expense must be documented with an invoice or another accounting document
2. Intended for employees - It must be clear that the items are intended for the company's employees
3. Connection with the business - The expense must be reasonably justified by the needs of the business
4. Proportionality - The value of the expenses should be proportionate to the size of the company and the number of employees

According to the ruling of the Director of the Tax Chamber in Warsaw referred to above, the following expenses can be treated as tax-deductible costs:

• Purchases of water, tea, sugar, coffee creamer and coffee for employees
• Biscuits and similar small food items for employees
• Coffee and tea served to business partners visiting the company

Refreshments for business partners and clients

Expenses on coffee, tea and water for business partners and clients visiting the company's premises can also be treated as tax-deductible costs. Such expenses are customary refreshments and help build good business relationships.

Key benefits of offering refreshments to business partners:

• Building a positive company image
• Creating a friendly atmosphere at business meetings
• Increasing business partners' trust
• Making negotiations easier
• Showing respect for guests

For expenses on refreshments for business partners to be treated as costs, they must meet the same criteria as expenses on drinks for employees: a connection with the business, proper documentation and no lavishness. Example:

A consulting firm regularly holds meetings with clients at its offices. At each meeting it offers guests coffee, tea and mineral water. These expenses are documented as client service costs and treated as tax-deductible costs, because they help build business relationships and clients' trust in the company.

It is important to distinguish customary refreshments from entertainment costs. Basic drinks such as coffee, tea or water are not lavish or ostentatious, so they are not treated as entertainment costs. The line can, however, be blurred – if a company serves exclusive, expensive drinks in luxurious settings, this may be classified as an entertainment cost.

Practical aspects of booking expenses on drinks

Booking expenses on coffee, tea and water correctly requires appropriate booking entries and proper cost classification. The process may differ slightly depending on the accounting system, but the general rules stay the same.

The basic booking procedure includes the following stages:

1. Receiving the source document - an invoice (for purchases up to PLN 450, also a receipt (paragon) showing the buyer's NIP (tax identification number), i.e. a simplified invoice) for buying the food products
2. Checking the document - verifying its formal and substantive correctness
3. Classifying the expense - determining the right cost category
4. Entering it in the books - booking the transaction in line with the chart of accounts
5. Settling VAT - where applicable, settling the tax on goods and services

Where a KPiR (tax revenue and expense ledger) is kept, these expenses should be entered in the column for other expenses (from 1 January 2026 – column 15). Companies keeping full accounting books should book these expenses to the appropriate cost-by-nature accounts. If the invoice for such purchases turns up late, our post explains how to book a found purchase invoice.

Example accounts for booking expenses on drinks:

• Account 402 - External services (if drinks are supplied as part of a catering service)
• Account 401 - Consumption of materials and energy (purchase of food products)
• Account 405 - Social insurance and other employee benefits (if treated as a benefit for employees)
• Account 409 - Other costs by nature

Settling VAT on purchases of drinks

When buying coffee, tea and water for the company, businesses can deduct VAT, provided the expenses are connected with the business. The right to deduct VAT follows from the fact that these items are used for taxable activity. VAT deductions and JPK files for clients are prepared by our accounting firm in Warsaw.

Conditions for deducting VAT on purchases of drinks:

• The items must be intended for the needs of the business
• The purchase must be documented with a VAT invoice
• The invoice must meet all formal requirements
• The business must be an active VAT payer

The VAT rate depends on the classification of the goods (CN). Coffee and tea are excluded from the reduced rates and are taxed at the standard rate of 23%, as is bottled water – the 8% rate applies only to water supplied through the water mains or by tankers. Reduced rates apply to, among others, sugar (8%) and milk (5%) – Annex 3 items 1, 2 and 16 and Annex 10 item 3 to the VAT Act.

Examples of VAT rates:

• Bottled drinking water - 23%
• Coffee beans - 23%
• Loose-leaf tea - 23%
• Instant coffee - 23%
• Milk - 5%
• Sugar - 8%

Documenting and recording expenses

Proper documentation of expenses on coffee, tea and water is key to accounting for them correctly as tax-deductible costs. Every expense must be documented in a way that makes its nature and purpose clear.

Basic documents required for accounting:

• VAT invoice (for purchases up to PLN 450, this can be a receipt showing the buyer's NIP)
• Proof of payment (transfer, bank statement)
• Internal documents stating what the items are intended for
• Stocktaking reports, where applicable

Additional documentation may include:

• Work rules setting out how drinks may be used
• Internal notes on meetings with business partners
• Records of food product consumption
• Documents confirming that health and safety obligations are met

The company should also keep records of food product consumption, especially if their value is significant. This may be a simple table or a more advanced stock system, depending on the needs and size of the business.

Monitoring and optimising the cost of drinks

Managing expenses on coffee, tea and water effectively requires regular monitoring and optimisation of these costs. Businesses should keep track of spending and look for ways to rationalise it without reducing employees' comfort.

Ways of controlling the cost of drinks:

• Regular analysis of spending on food products
• Comparing prices from different suppliers
• Negotiating discounts on larger orders
• Monitoring consumption and eliminating waste
• Introducing limits or budgets for drinks

Optimisation strategies may include:

• Buying items in larger quantities to obtain discounts
• Choosing suppliers offering the best value for money
• Introducing a self-service system for employees
• Regularly reviewing the team's preferences
• Taking advantage of promotions and special offers

In a company employing 20 people, expenses on coffee, tea and water are usually a small cost item. Comparing suppliers' offers and buying in larger quantities make it possible to reduce them without any loss of quality, while keeping all the benefits of providing drinks to employees.

Most common mistakes in accounting for expenses on drinks

Businesses often make mistakes when accounting for expenses on coffee, tea and water, which can cause problems during tax audits. Knowing the most common mistakes will help you avoid them and account for these costs correctly.

Typical accounting mistakes:

• Confusing the cost of drinks with entertainment costs
• Lack of proper documentation of what the items are for
• Settling VAT incorrectly
• Including private expenses in business costs
• No records of item consumption

Other common mistakes:

• Not distinguishing between business and private expenses
• Not keeping stock records of food products
• Recording all catering expenses in a single category
• Not updating internal procedures
• Documenting expenses irregularly

To avoid these mistakes, it is worth:

• Keeping your knowledge of tax rules up to date
• Keeping detailed documentation of all expenses
• Consulting an accountant or tax adviser on doubtful cases
• Introducing clear internal procedures
• Regularly checking that the accounts are correct

Frequently asked questions