Vaccine for influenza taxed

As one of the proposed treatment of virus pandemic Covid-19 The government recommends influenza vaccines. This can be particularly important for entrepreneurs who do not want to risk another stagnation in their company. However, financing such vaccination will result in additional tax revenues.

This results from the reply received by the Republic of Poland from the Ministry of Finance[1]. This is contrary to the Ministry's previous assurances regarding the liberal treatment of employee benefits, which are intended to prevent coronavirus infection.

It should be mentioned that it is the chief health inspector and doctors recommend influenza vaccines as a way to build their own resistance to Covid-19. However, according to regulations Act dated 26 July 1991 on income tax on individuals (i.e.

Journal of Laws of 2020, item 1426 as amended, Further to the PIT Act), the employer's payment of such vaccination to its employees will create additional income which will be subject to taxation and collection.

Article 12(1) The PIT Act provides that all types of cash payments and the monetary value of benefits in kind or their equivalents, irrespective of the source of the financing of these payments and benefits, and in particular: basic salaries, overtime salaries, various types of allowances, prizes, allowances for unused leave and any other amounts, irrespective of whether their amount has been fixed in advance and the cash benefits incurred for the worker, as well as the value of other unpaid benefits or partially paid benefits.

This means that virtually every benefit received by an employee from an employer in connection with the provision of work is income from that relationship. In the case of influenza vaccines, it may be referred to as ‘other free or partially paid’. The interpretation of this provision was analysed by the Constitutional Court in its judgment of 8 July 2014 (reference no. K 7/13). He assumed that the benefit should be accepted as the employee's income if:

• has been fulfilled with his consent, i.e. he made full use of it voluntarily,
• has been fulfilled in its interest and not in the interests of its employer, and has benefited (increase in assets or avoid spending),
• the benefit is measurable and assigned to a specific employee.

Special conditions second and third there are no doubts in this case. The vaccine allows the worker to benefit because he himself does not have to bear this expense, it is measurable and assigned to an individual worker. Doubts could arise in the event of first the condition, especially if vaccinations were compulsory, because then they could not be described as employee benefits.

The value of vaccines does not benefit from a specific exemption under Article 21(1)(11a) PIT Act. This was highlighted in individual interpretations of, among others, the Director of the Tax Chamber of 9 February 2015 No IBPBII/1/415-906/14/BJ:

„The value of preventive vaccination will therefore be exempt from personal income tax if all the conditions set out in that provision are met, i.e.:

• these benefits must be based on the principles of health and safety at work (including the specific conditions and nature of the service carried out),
• the beneficiaries of these benefits are those who have a business relationship,
• those benefits must be granted on the basis of separate laws or implementing rules issued under those laws.’

There will therefore not be a tax obligation to finance the vaccination of workers if the employer is obliged to do so by the imposed and commonly applicable laws.

These provisions include the Regulation of the Council of Ministers of 3 January 2012 on the list of types of professional activities and the recommended preventive vaccinations required in workers, officers, soldiers or subordinates taking up employment, employed or designated to carry out those activities (Journal of Laws, item 40).

It imposes the obligation to vaccinate against influenza people who may become infected during their official duties.

The Ministry of Finance immediately referred to the publication.

According to the information provided by the Polish Press Agency, in accordance with the decision of the Minister of Finance, work started on a regulation exempting individuals from the obligation to pay income tax on the value of unpaid benefits, in the form of preventive vaccination against influenza, received during the period of the virus epidemic Covid-19.

According to the information contained, that Regulation is to exempt such tax revenues entirely and the amounts paid in advance are to be reimbursed to the taxable person on an annual basis.

It is therefore necessary to await the content of the regulation itself.

Author: Damian Kuszewski

The author is a graduate of the Warsaw School of Economics in Finance and Accounting, and is currently a law student at SWPS. From 2018 Associated with Russel Bedford Poland. His professional interests are tax law and, in particular, income taxes.