Securing a PLN 1.2 million PR budget against a tax audit
For a real estate development client, we prepared full documentation justifying crisis PR spending. During an audit in May 2024, officials did not question a single zloty.
We helped a developer from Krakow defend crisis PR spending against the tax office. The documentation covered PLN 1,240,500 in costs that the tax collector could have considered representation, which would prevent tax deduction.
The challenge
The developer was carrying out a large residential investment in Podgórze. During construction, social protests and negative publications appeared in the local media. Management decided to launch a large budget for crisis management. Over 8 months, the company spent PLN 1,240,500 on external agencies and media.
A problem appeared during a tax audit started in March 2024. Officials questioned the purpose of these expenses. They claimed that image building is representation, not a tax-deductible cost. The client faced the necessity to pay PLN 235,695 in overdue tax along with criminal interest.
Our approach
Orzeł Consulting Group analyzed 34 invoices and 112 reports on agency activities. Our team, including a tax auditor and a cost documentation specialist, segregated every expense. Marketing is mathematics, so we had to prove the link between PR and real apartment sales.
We removed general phrasing from invoice descriptions that irritates officials. Instead, we linked every action to specific business goals. Numbers don't lie, so we showed in black and white how crisis communication saved property reservations worth PLN 14.3 million.
The solution
We prepared an evidence folder consisting of 148 pages. It contained sentiment analysis in media before and after the campaign and a list of 27 saved reservation contracts. Every zloty spent on PR was assigned to a specific stage of the sales process.
We also developed new rules for describing marketing invoices for the accounting department. Thanks to this, every subsequent campaign is safe at the moment of booking. Hard tax data became the foundation of Kraków-Inwest Deweloper's financial security.
Results
The tax audit ended in May 2024 with full success. The Tax Office fully accepted the submitted documentation and considered the expenses to be a tax-deductible cost.
Timeline
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October 2023Preliminary audit of PR agency invoices and reports
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December 2023Preparation of the full evidence folder
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March 2024Start of the tax audit at the client's
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May 2024Receipt of the final protocol without comments
"Thanks to Orzeł Consulting Group, the office audit was only a formality. They knew exactly what arguments to use so that the officials had no room for discussion. We are recovering capital that could have been lost in penalties."