Autumn, besides its charms, also brings with it a higher incidence of flu and colds. This translates into absenteeism from work, requiring other employees to take over or to accumulate tasks upon return.
It's common knowledge that prevention is better than cure, and the importance of prevention is undeniable. But what does this have to do with taxes? Is there a planned tax increase on medicines? Fortunately, no. The connection is that an employer's investment in healthy eating can pay off not only through lower labor costs but also through lower taxes. Employers have the right to deduct expenses for purchasing fruit and vegetables for employees and co-workers as tax-deductible costs.
The Director of the National Tax Information Service recently took this position in his tax interpretation 1 The authority reiterated that tax-deductible costs are costs incurred to generate revenue from a source of revenue or to maintain or secure a source of revenue, unless the law explicitly excludes them from tax-deductible costs. Therefore, for an expense to be recognized as a tax-deductible cost, there must be a connection between its incurrence and the creation, increase, maintenance, or security of the source of revenue.
Expenditures on purchasing fruit and vegetables for employees and co-workers are linked to revenue. Besides reducing sick leave, this also improves employee productivity and makes the workplace more attractive to potential employees and co-workers. Fruit days also boost team morale and strengthen relationships between employees and co-workers, thus increasing the effectiveness of their collaboration.
The authority ruled that these expenses were not incurred for employer representation (which the law excludes from being considered a tax deductible expense) and therefore could be deducted from income. Importantly, this interpretation applies to both expenses incurred for employees and business associates (contracts of mandate, B2B). Therefore, regardless of whether employees employed under an employment contract or a civil law contract benefit from the benefits provided, their work contributes equally to income.
For those who are more cautious, it is worth mentioning one more thing: expenses for purchasing vitamins for employees and co-workers will also be included in the costs of obtaining income2.
Usually, in a barrel of honey (which is so healthy), there's a fly in the ointment (also with health-promoting properties). And so it is in this case. While expenses for boosting the immunity of employees and co-workers can be included in the employer's income-earning costs, a sole proprietorship cannot deduct expenses for boosting their own immunity. Tax authorities consistently consider these expenses to be personal, and therefore not tax-deductible.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of November 13, 2023.
- Individual tax ruling of October 26, 2023, reference number 0114-KDIP2-2.4010.465.2023.1.KW ↩︎
- Such a position, e.g. Individual interpretation of 11 December 2017, no. 0114-KDIP3-1.4011.320.2017.2.IF ↩︎
