COVID-19 tests can be a tax-deductible expense for employers (No. 954)
In the present state of affairs, many employers find themselves in a situation where they require COVID-19 tests for their employees, mainly as a measure of prevention.
The Financial Administration commented on the issue of tax efficiency of the expenditures on COVID-19 tests. It states that, due to the extreme pandemic conditions, if the employer carries out preventive measures based on testing employees with regard to the risk of spreading the infection among employees at the workplace, the expenses for these tests can be considered as tax-deductible costs. As for the employee, they do not form taxable income.
However, if the employer defrays the COVID-19 tests for the employees in case of purposes unrelated to work (e.g. for their private leaving the Czech Republic for abroad), the expenses related to such testing are not tax effective. Even in this case, it is not taxable income for the employees.
In order to make the reasons for testing employees explicit, we recommend you to establish an internal instruction and to identify cases, in which the employer proceeds to preventive testing for COVID-19.