Court decision on proof of advertising services

In this case, the taxpayer claimed the services of PPC advertising in the Google AdWords system, keyword analysis and optimisation in its taxable costs. However, the tax authority concluded that the complainant had not proved that she had actually received those services. After unsuccessful procedure before the Regional Court, the taxpayer submitted a cassation appeal to the Supreme Administrative Court and required cancellation of the decision in question.

Nevertheless, the Supreme Administrative Court stipulated that in order to prove receipt of the advertisement services it is necessary to present also screenshots that capture the advertisement directly on Google's internet search engine. After all, if the advertisement is provided exclusively online, there is no other way to capture it than with a screenshot. Although the taxpayer attached the screenshots to each tax receipt, these were identical and always contained the same data (both the time stamp for each search page as well as the number of search results at the top of the page). The Supreme Administrative Court therefore agreed with the opinion of the Regional Court that these screenshots could not prove advertising for the period from October 2012 to December 2013.

Since advertising services are nowadays an integral part of business activities, we strongly recommend paying due attention to this issue. In line with the law, the burden of proof lies on the side of taxpayer and thus, it is advisable to obtain evidence on an ongoing basis and not to wait until the moment when the tax audit is opened, and the item is subject to verification.

If you would like to receive more information on this issue, please do not hesitate to contact us.