Remote work and PIT

31 March 2021

Remote work during the pandemic in the context of accounting for personal income tax is welcomed by tax authorities.

Rulings favourable to taxpayers

Tax authorities take a positive approach towards payment of extra allowances for utilities or equipment necessary to perform remote work. Rulings issued in this respect are favourable to taxpayers. Additional benefits do not have to be added to the employees' income.

The exemption is based on the Act of 2 March 2020 on Specific Steps Adopted to Prevent and Combat COVID-19, Other Contagious Diseases and the Crises They Cause during the state of epidemic emergency or the state of epidemic.

Positive tax rulings mean that the reimbursed costs of equipment purchased to perform remote work and reimbursed expenses as a flat amount will not generate income for employees as defined in the Personal Income Tax Act. At the same time, employers as withholding agents will not have to fulfil any of the agent's obligations in this regard.