Beware of deductions for work clothes purchases
Posted: Mon Dec 23, 2024 8:39 am
The purchase of work clothes is a deduction that sometimes includes all kinds of clothing, such as a bottomless jacket. The concept of work clothes is often applied in a broad way and different from the interpretation of the Tax Agency .
First of all, it should be clarified that tax regulations do not allow the deduction of any element that is not exclusively affected by economic activity, unless it is an investment asset.
A capital good is a phone number in ukraine work instrument intended to produce for a period of more than one year (machinery, tools, vehicles, etc.). These items can be used in business activity and in a private capacity, and the proportional part for professional use can be deducted .
But clothing is not an investment good, so in order to deduct the purchase cost, it must be used exclusively in the business . The problem this raises is how to prove that a garment is used only for work? Because it must be taken into account that the means of proof comes from the taxpayer and that, if he cannot prove this use, he would not be entitled to make the deduction.
The only admissible deductibility criterion would be in cases where the self-employed person acquires work clothing that is not suitable for private use. An example of this is the work overalls worn by plumbers, mechanics or health professionals . In these cases, a 100% deduction could be applied, taking into account that the use of these garments is limited, in practice, to the development of these activities.
Therefore, all those professionals who purchase formal wear must be very careful to include it as a business expense, because the use of this clothing in the private sphere is more than usual.
First of all, it should be clarified that tax regulations do not allow the deduction of any element that is not exclusively affected by economic activity, unless it is an investment asset.
A capital good is a phone number in ukraine work instrument intended to produce for a period of more than one year (machinery, tools, vehicles, etc.). These items can be used in business activity and in a private capacity, and the proportional part for professional use can be deducted .
But clothing is not an investment good, so in order to deduct the purchase cost, it must be used exclusively in the business . The problem this raises is how to prove that a garment is used only for work? Because it must be taken into account that the means of proof comes from the taxpayer and that, if he cannot prove this use, he would not be entitled to make the deduction.
The only admissible deductibility criterion would be in cases where the self-employed person acquires work clothing that is not suitable for private use. An example of this is the work overalls worn by plumbers, mechanics or health professionals . In these cases, a 100% deduction could be applied, taking into account that the use of these garments is limited, in practice, to the development of these activities.
Therefore, all those professionals who purchase formal wear must be very careful to include it as a business expense, because the use of this clothing in the private sphere is more than usual.