Coronavirus infection intensified again in the fall. For rapid detection of infected and disease prevention in teams, many companies test staff for COVID-19 at their own expense. Is the cost of testing subject to personal income tax (hereinafter – PIT)?
It should be recalled that the total monthly (annual) taxable income of the taxpayer does not include, in particular, funds or value of property (services) provided as assistance for treatment and medical care of the taxpayer or family member of a natural person of the first degree of kinship, child, which is under the guardianship or custody of the taxpayer, subject to documentary evidence of the costs associated with the provision of such assistance (in the case of funds), including, but not limited to, the purchase of medicines and medical devices for individual use, at the expense of the employer, in the presence of relevant supporting documents, except for costs reimbursed by payments from the fund of compulsory state social health insurance (paragraph 165.1.19, item 165.1 of Article 165 of the Tax Code of Ukraine (hereinafter – the Tax Code).
Therefore, the cost of medical services in the form of tests for the prevention of acute respiratory disease COVID-19, provided by a medical institution on the basis of a contract for medical care provided to an individual (employee) at the expense of the employer, is not included in the total monthly (annual) taxable income of the taxpayer subject to compliance with the requirements specified in paragraphs 165.1.19, item 165.1 of Art. 165 of the Tax Code.
At the same time, according to paragraph “g” 164.2.17, item 164.2 of Art. 164 of the Tax Code the total monthly (annual) taxable income of the taxpayer includes income received by the taxpayer as an additional benefit in the form, in particular, of the value of goods received free of charge (works, services), determined by the rules of the normal price.
If the additional benefits are provided in non-monetary form, the amount of tax of the object of taxation is calculated according to the rules specified in item 164.5 of Art. 164 of the Tax Code.
Therefore, if the legal entity – the employer does not comply with the requirements of paragraph 165.1.19, item 165.1 of Art. 165 of the Tax Code, the cost of services provided free of charge to individuals – employees in the form of testing for coronavirus disease (COVID-19), is included in the total monthly (annual) taxable income of such employees as an additional benefit and is subject to PIT at 18%, specified in item 167.1 of Art. 167 of the Tax Code.
It should be noted that a legal entity that provides income in the form of additional benefits must perform all the functions of the tax agent defined by the Tax Code.
