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Expenditure on the purchase of medicines and vaccinations for employees in tax costs


Expenses incurred by the employer in purchasing pharmaceuticals, medicinal products and other preparations for employees that strengthen the immunity of their organisms during an epidemic, as well as flu vaccinations, constitute tax deductible costs pursuant to Art. 15 (1) of the CIT Act. This standpoint was confirmed by the Head of the National Revenue Information Service (KIS Head) in an individual tax ruling of October 30, 2020 (case no. 0111-KDIB1-3.4010.423.2020.1.APO).

The application was submitted by a taxpayer dealing with the production and sale of windows. On the day the application was filed, its premises were located in a so-called red zone, due to the occurrence of a significant number of COVID-19 infections in the county. The applicant, taking into account the situation related to the coronavirus epidemic in the whole country, took measures to protect its employees from infection and disease. For this purpose, he purchased for them drugs, medicinal products and other preparations that strengthen immunity, and flu vaccines. At the same time, the expenses incurred limited the risk of reduction in the production capacity. Therefore, the Company submitted an application to determine whether it was entitled to recognize the expenses incurred as deductible costs.

The Head of KIS has agreed with the taxpayer that he is entitled to include the above-mentioned expenses as a cost for tax purposes. Under the CIT Act, the taxpayer has the right to deduct from the revenue the costs incurred in direct or indirect relation to the business activity conducted, the incurring of which affects the amount of the revenue achieved. Tax-deductible revenues comprise reasonably and economically justified expenses related to the conduct of a business activity, incurred in order to achieve, secure or maintain a source of revenue.

A large number of employees on sick leave and quarantine would really have resulted in a significant reduction in productivity, hence affecting every company’s bottom line. Expenses incurred by taxpayers in purchasing pharmaceuticals, medicinal products and other preparations that strengthen employees’ immunity in the period of epidemic, and flu vaccinations secure and preserve sources of revenue in a rational way.

It is worth mentioning the tax comments issued by the Minister of Finance of July 21, 2020 concerning new preferences applied in connection with incurring negative economic consequences due to COVID-19, whereby businesses incurring expenses as a result of their own decisions and rationally aiming at counteracting the epidemic threat are entitled to include them as tax deductible costs within the meaning of Art. 15 (1) of the CIT Act, provided that they have been properly documented.


Magdalena Walczyńska, Tax Consultant, ATA Tax Sp. z o.o.

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