You want to invite your community to buy you a coffee, but you are not sure what the tax office will say? No worries. In this short guide, you will learn everything you need to know about gift tax and how to account for the coffees you receive from your community.
This text was created in cooperation with Anna Rudkowska, co-founder of e-tworca.pl, a business and accounting platform for online creators.
Support from fans is a donation
A virtual coffee that your fans buy you via buycoffee.to is, from a formal perspective, treated as a donation. That is a voluntary payment made to another person or organization, with no expectation of something in return. In the vast majority of cases, creators operate either as private individuals or as sole proprietors. This makes it possible to settle these funds under the rules for donations. Creators running a sole proprietorship account for donations in the same way as private individuals, as described in this article.
Donations are taxable, but it is worth knowing that the rules are very favorable. Not every donation has to be reported to the tax office and taxed right away, thanks to the tax-free amount. This means you only need to complete the reporting and tax formalities if the total donations from a given donor, calculated over the current year and the five previous calendar years, exceed the tax-free threshold. Note that the tax-free amount applies separately to each supporter.
The tax-free amount for inheritance and donation tax
The level of the tax-free amount depends on the relationship between the recipient, the creator, and the donor, the supporter. There are three tax groups:
Group I includes the closest family, for example spouses, children, parents, siblings, grandparents. The tax-free amount is 36,120 PLN.
Group II includes extended family, for example uncles, aunts, and cousins. The tax-free amount is 27,090 PLN.
Group III includes the most distant relatives and all other unrelated persons. The tax-free amount is 5,733 PLN.
The one-time donation model used on buycoffee.to, where payments are usually single, not recurring, and most often do not exceed a few dozen or a few hundred zloty, makes it very unlikely that any individual supporter will exceed the tax-free threshold. In practice, you will most often have no obligation to report a donation or pay the tax at all.
Still, it is worth monitoring incoming payments, especially if you have very loyal and generous fans who buy you coffee often.
How to monitor the donation limit. Practical tips
The key is how to count the time window. Many guides say “five years,” but in fact, the period you must analyze is the current year plus the five previous calendar years. In practice, this means that if someone buys you a virtual coffee on December 12, 2023, you need to review the entire period back to January 1, 2018, and check whether that person’s total donations during that time exceeded the tax-free amount. At the start of each new year, the window shifts. In 2024, you would consider the period from January 1, 2019.
Also note that when you total donations from a given supporter, you must include the full amount they paid, not only what you can actually withdraw. Do not subtract platform commissions or transaction fees. The total amount given is what counts.
A good idea is to create an Excel file where you regularly record and total donations from your supporters. Save the payment dates, amounts, donor details, and sum donations for each person. You can use the supporter list from your buycoffee.to account, found in the Statistics tab. This way, you will know whether every supporter is still within the limit. You will also document payments in case the tax office ever asks, and you will gain a better view of how much you receive each month.
How to report a donation
If it turns out that one of your supporters exceeds the tax-free amount, you will need to report the donation to the tax office. You have one month from the date you received the payment that caused the threshold to be exceeded. Remember that “receiving” the donation means the moment the payment arrives in your buycoffee.to account, not the day you withdraw the funds.
You should report the donation to your tax office. Formally, you do this using the SD-3 form, used to file a tax return on the acquisition of property or property rights from persons in the third tax group. You can submit it:
electronically via the e-Deklaracje application,
on paper at the tax office for your place of residence,
by sending the completed form by post.
Prepare additional documents as well:
a history of received payments from buycoffee.to, and possibly transfer confirmations or statements from other platforms,
a summary, for example in Excel, showing that this person exceeded the tax-free threshold and when it happened.
You can attach the payment confirmations and your summary to the donation report, or provide them later at the request of the tax office. It is best to contact the unit dealing with donations at your tax office and ask what order they prefer. You can find the relevant phone number on your tax office website in the Phone Numbers section.
After reporting the donation, you must wait for the tax office to issue a decision stating the tax due. After you receive it, you will have 14 days to pay the amount to the appropriate tax office account. You can also pay via the e-Tax Office portal.
Donation tax
The amount of tax due depends on the donor’s tax group and the bracket into which the reported donation falls.
You can estimate the tax due using online inheritance and donation tax calculators. Pay attention to whether they are up to date. The current rules on tax-free amounts apply from July 1, 2023. In the calculator, enter the total value of the donation and select the correct tax group.
Donations vs other monetization methods
Compared with other ways creators earn money online, donations are very beneficial, both financially and practically. If you sell your own products, earn from ads, or do sponsored collaborations, every transaction is taxable. With donations, only amounts exceeding the tax-free threshold are subject to reporting and tax.
Thank-yous for donations. Donation vs sale
When you receive a gift, it is polite to say thank you. buycoffee.to lets you send supporters personalized thank-you emails. Many creators go a step further and offer additional ways of saying thanks, for example access to a private group or supporter-only newsletter, sending e-books, videos not published elsewhere, or other benefits. It is worth thinking carefully about how you thank donors, because it can affect taxes.
A donation, by definition, should be non-reciprocal. If you exchange money for a specific item or service, there is reciprocity, and the situation starts to look more like a sale than a donation. That matters, because sales are settled differently. You can settle donations as a private individual. Regular sales should be settled under a business activity, or possibly as unregistered activity, and then every transaction is taxed. With donations, only those that exceed the tax-free threshold trigger obligations.
Keep this in mind when you invite your audience to buy you a coffee. Talk about supporting your work, contributing to the next ambitious episode, or saying thanks with a small payment if your blog post moved someone. Avoid describing in detail what someone will receive in exchange for a payment. If you plan to give something back, for example a small e-book, do not describe exactly how many pages it has, what knowledge is inside, or what each chapter covers, because that starts to sound like a product. Instead, you can say more mysteriously that everyone who buys you a coffee for more than 50 PLN will receive a gift. It is better to pleasantly surprise supporters than to get into trouble with the tax office.
Summary. The most common mistakes when accounting for donations
Documenting and accounting for donations is not difficult. The biggest mistake creators make is not thinking about settlements at all and not monitoring whether donations from any supporter should be reported. If you do monitor this, you are already halfway there.
The other half is within reach if you remember a few key points:
Collect the necessary data. To account correctly, you need at minimum the donor’s first and last name and email address.
Use the full donation amount. Do not deduct commissions or fees.
If you use multiple platforms, check whether the same donors support you through different channels. You must total all their payments.
Watch the difference between donation and sale. Make sure your thank-you is more symbolic.
Analyze the correct period. When you receive a donation, review the current year and the five previous calendar years to see whether the donor’s total payments exceed the tax-free threshold.
Want to dive deeper? See the regulations on donations:
The Act of July 28, 1983 on Inheritance and Donation Tax.
Regulation of the Minister of Finance of June 28, 2023 on setting tax-free thresholds and tax scales for inheritance and donation tax (Journal of Laws 2023, item 1226).
Regulation of the Minister of Finance of November 20, 2015 on the template for notification of acquisition of ownership of items or property rights.
Regulation of the Minister of Finance of November 27, 2015 on the tax return filed by inheritance and donation tax taxpayers.
Regulation of the Minister of Finance of August 22, 2005 on the jurisdiction of tax authorities.
The advice in this article applies to accounting for donations by private individuals and sole proprietors. If you use buycoffee.to on behalf of a company, foundation, association, or another institution, consult your specific settlement rules with a tax advisor.
Anna Rudkowska is an accountant specializing in supporting influencer-run businesses and co-founder of e-tworca.pl, Poland’s first comprehensive knowledge source on earning online for internet creators.