Tax consequences of acquisition and use of protective equipment (No. 907)

Many employers have provided face masks, disinfectants, and possibly other protective equipment to protect their employees from COVID-19 spread.

The acquisition of protective equipment used in connection with economic activity (i.e. including the protection of employees) is considered as tax deductible cost with the possibility of deducting input VAT on input. It does not matter whether the protective equipment is manufactured in-house or purchased from third parties.

Protective equipment that has been or is produced from own resources and further distributed, for example, to emergency services or social services, is a gift and the related costs cannot be considered tax deductible. However, based on the confirmation of provided gift, such costs can be included as the sum reducing the tax base in income tax return. Until the end of emergency, the free supply of protective equipment, including the supply of materials for their production, is VAT free based on a waiver published in Financial Bulletin No. 6/2020 (available only in Czech).

publikováno 30.04.2020