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As most professional activities have moved online, and electronic devices are used every day, our eyesight suffers. More and more people working at computers report worsening eyesight and other related problems. They seek a solution, most commonly buying prescription glasses. Can the purchase be included in tax-deductible costs? How does VAT deduction work for glasses provided to an employee?
EMPLOYEE ENGAGED UNDER AN EMPLOYMENT CONTRACT AND A CIVIL-LAW CONTRACT
Under the Labour Code, an employer must provide employees with “personal protective equipment protecting them against hazardous and harmful factors in the work environment”. As we know, working at a computer is one such harmful factor, so an employee under an employment contract may request prescription glasses or blue-light-blocking glasses from the employer. This is also confirmed by the consistent position of the ordinary courts.
The situation differs for those working under a civil-law contract, either a mandate contract or B2B. Such contracts do not create an employment relationship, which on the one hand is an advantage because contractors have greater freedom in performing their duties, but on the other hand means that they lack many benefits associated with employment contracts, such as paid leave. The employer is obliged to finance or subsidise the purchase of prescription or blue-light-blocking glasses only where an employment relationship exists, so people under civil-law contracts cannot expect this. Of course, a business owner may choose to pay for glasses for a contractor under a mandate or B2B arrangement, but that would be entirely voluntary.
Sometimes a client decides to buy prescription glasses for a contractor or pay part of the purchase cost. In that case the free benefit should be subject to contributions and taxation. In practice, however, no one remembers this: the client passes money for glasses to the contractor informally, or perhaps includes it in the business's own expenses.
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VAT DEDUCTION ON GLASSES PURCHASED FOR AN ENTREPRENEUR
If, as an entrepreneur, you wonder whether prescription or blue-light-blocking glasses used while running your business can be included in tax-deductible costs, we have bad news. Unfortunately, under Polish law this expense is personal rather than business-related and cannot be included in tax costs. In individual tax rulings, tax authorities justify this position by saying that an entrepreneur with a vision defect would buy the glasses even if they did not run a business. In other words, an owner's use of glasses does not directly improve the business's operation; it only protects the owner's eyesight.
VAT DEDUCTION ON GLASSES PURCHASED FOR AN EMPLOYEE
The situation is similar when providing glasses to an employee. If the invoice is issued to the employee rather than the company, the employer must cover the full expense and cannot deduct VAT on the purchase. If the invoice is issued to the company, the tax authorities' positions differ. Until recently the tax office issued individual rulings in taxpayers' favour allowing VAT to be deducted on glasses. According to one of the latest tax rulings, IPPP3/443-1068/13-4/MKw, the tax office held that an employer may not deduct VAT on glasses purchased for an employee. We recommend that businesses wishing to deduct VAT on glasses apply for an individual tax ruling; an ORD-IN application can be filed with the relevant Tax Chamber. Without a clear ruling, an employer who deducts VAT on such a purchase risks having to repay it during a tax audit. Without an individual tax ruling, the tax office may seek repayment of the VAT even up to five years after it was deducted.
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Summary
An employee under an employment contract has the full right to request reimbursement or a subsidy from the employer for prescription or blue-light-blocking glasses.
An employer is not obliged, but may choose, to subsidise or buy glasses for people engaged under civil-law or B2B contracts.
An employer deducting VAT on prescription or blue-light-blocking glasses bought for an employee risks having to repay the VAT previously deducted if audited by the tax office.
Under the PIT Act, an entrepreneur who buys glasses for themselves may neither include the purchase in tax costs nor deduct VAT on the invoice.
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