17 September 2020

Expenditure on promoting education, as a value in itself, among the local community which is not geared towards increasing income from tuition, cannot be qualified as capital expenditure. As current expenses, the expenditure is eligible to be covered by subsidies for non-public schools. Such conclusions can be drawn from the Supreme Administrative Court’s ruling dated 9 September 2020, made in cassation appeal case, ref. no I GSK 248/18 brought in by C. Sp. z o.o. seated in Piła.

The Supreme Administrative Court ruled in the case re. adequate qualification of expenses incurred by a non-public school on promoting the entity through information campaigns about recruitment processes in progress, the scope of the educational offering and enrollment conditions.

The court approved the position of the appealing company represented by a team of Sobczyńscy Adwokaci Law Firm lawyers, whereby the school’s advertising activity geared towards boosting income from tuition fees must be differentiated from information campaigns undertaken in line with the school’s statutes as part of its social prevention tasks. In the text of the ruling the Court highlighted that the promotion activities undertaken by the Company, which did not entail tuition fee collection, were not commercial in nature. The foregoing actions were performed in execution of the tasks specified in the school’s statutes and were aimed at informing the local community about the possibility for adults to study and upgrade their level of education. In the Court’s view, the foregoing actions should be identified as education, upbringing and guarding tasks, including social prevention ones, which are subsidized with grants received from local government units.

The sentence was issued with reference to the cassation appeal made by a team of Sobczyńscy Adwokaci Law Firm lawyers (team headed by advocate Michał Sobczyński) on behalf of the company – party to the proceedings. The appeal was made against the Provincial Administrative Court in Poznań which upheld the decision of the Local Government Appeal Council in Piła in the matter of the obligation imposed on the company to return the educational grant used in breach of its purpose. The Provincial Administrative Court took the position that the costs of advertisement and promotion cannot be qualified as eligible for a subsidy. In the Court’s opinion, advertisement and marketing serve primarily the purpose of boosting income, while, the provision of information on the educational offering is merely informing about the scope of conducted activity rather than being the educational activity itself defined as the process of education, upbringing and guarding. The Supreme Administrative Court disagreed with that view by overturning the ruling and the decision appealed by the client.