Area: Zdravstvo
Competent authority: MDDSZ, MF
EZU URL: .nan
Initiative ID: 514
Initiative accepted and completed: '2015-06-03'
Initiative classified in EZU: .nan
Initiative forwarded in response: '2015-03-27'
Initiative published: '2015-03-27'
Initiative submitted: '2015-03-25'
Response from the competent authority: "Reply from the Ministry of Health:Articles\
  \ 6 and 32 of the Occupational Safety and Health Act (ZVZD-1) stipulate that employers\
  \ must plan and implement health promotion at the workplace, and provide the necessary\
  \ resources and monitoring of its implementation. It is clear from your letter that\
  \ you want the company to be able to recognise the cost of implementing workplace\
  \ health promotion activities.Please find below an explanation from the Tax Administration\
  \ of the Republic of Slovenia, No 4230- 548528/2013 dated 8 October 2013.\"The taxpayer\
  \ states that the Occupational Health and Safety Act - ZVZD-1 (Official Gazette\
  \ of the Republic of Slovenia, No 43/11) stipulates that the employer must ensure\
  \ the safety and health of workers at work and that the employer must plan and implement\
  \ health promotion at the workplace. To this end, the employer is obliged to assess\
  \ in writing the risks to which workers are or may be exposed at work and to draw\
  \ up and adopt a safety statement with a risk assessment in writing. The safety\
  \ statement with a risk assessment must contain, in particular, a plan for the implementation\
  \ of the prescribed requirements and measures, a plan and procedures for the implementation\
  \ of measures in cases of imminent danger, and the definition of the obligations\
  \ and responsibilities of the persons responsible for ensuring safety and health\
  \ at work, both the employer and the workers. In the safety declaration with risk\
  \ assessment, the employer shall lay down the specific health requirements to be\
  \ met by workers on the basis of an expert assessment by an occupational health\
  \ practitioner. Under Article 32 of ZVZD-1, the employer must plan and provide the\
  \ necessary resources for health promotion at the workplace, as well as the means\
  \ of monitoring its implementation. Guidelines for the definition and preparation\
  \ of workplace health promotion will be issued by the Minister responsible for health.\
  \ From a note by the Ministry of Labour, Family, Social Affairs and Equal Opportunities,\r\
  \nLabour Inspectorate of the Republic of Slovenia Health Promotion at the Workplace\
  \ of 27 July 2012, it is clear that the European Agency for Safety and Health at\
  \ Work lists several possible measures among the employer's appropriate individual\
  \ measures for health promotion at the workplace.The Labour Inspectorate monitors\
  \ the implementation of ZVZD-1, and an employer is liable to a fine if it fails\
  \ to take the measures prescribed by ZVZD-1 and to ensure that they are implemented.\
  \ When planning and implementing workplace health promotion, certain issues arise\
  \ with regard to the treatment of employer payments in terms of the employee's bonus,\
  \ the right to deduct VAT and the tax deductibility or non-recognition of expenses.\
  \ The following clarification is provided in line with the Ministry of Finance:1.\
  \ Tax treatment of employer payments for workplace health promotion from an income\
  \ tax perspectivePayments made by an employer for the purpose of workplace health\
  \ promotion cannot generally be excluded from bonuses. In determining whether or\
  \ not these payments are considered to be a bonus, the facts and circumstances of\
  \ each case must be taken into account in accordance with the applicable definition\
  \ of bonuses under the Income Tax Act - ZDoh-2.In relation to the provision of health\
  \ promotion at the workplace, under ZVZD-1, it is necessary to distinguish between\
  \ the labour law and tax aspects.According to the Income Tax Act - ZDoh-2 (Official\
  \ Gazette of the Republic of Slovenia, No. 13/11 - UPB7, 24/12, 30/12, 40/12-ZUJF,\
  \ 75/12 and 94/12), all income is taxable, except for that which is explicitly mentioned\
  \ in the Act as non-taxable or exempt from income tax. According to Article 36(1)\
  \ of the Income Tax Act, income from employment includes any payment and bonus related\
  \ to employment. According to Article 39(1) of the Income Tax Act, a bonus is any\
  \ benefit in the form of a product, service or other benefit in kind provided to\
  \ an employee or a member of his family by an employer or other person in connection\
  \ with employment.Article 39(3) of the Income Tax Act specifies which benefits are\
  \ not considered to be a bonus. According to this provision, certain payments made\
  \ by the employer which are linked to the implementation of ZVZD-1 are also excluded\
  \ from the bonus, namely:\r\n- employer's payments for medical examinations of employees,\
  \ which the employer is obliged to provide on the basis of the law regulating occupational\
  \ safety and health and the failure to provide medical examinations or to pay for\
  \ such examinations would constitute a breach of the law and thus the employer's\
  \ criminal liability (Article 39(3)(3) ZDoh-2), the types and scope of medical examinations\
  \ are specified in more detail in the Regulation on preventive medical examinations\
  \ of employees;\r\n- the employer's payment for the vaccination of employees, provided\
  \ that the safety declaration with the risk assessment of the employee's workplace\
  \ in accordance with the regulations governing occupational safety and health shows\
  \ that such employee must be provided with vaccination (Article 39(3)(4) ZDoh-2);\r\
  \n- payments by the employer for insurance of employees against accidents at work,\
  \ which the employer is obliged to provide under the law and the failure to provide\
  \ insurance or to pay would constitute a breach of the law (Article 39(3)(5) ZDoh-2).Payments\
  \ by the employer for health promotion which cannot be classified as a benefit under\
  \ Article 39(3), (4) or (5) ZDoh-2. Bonuses which are not provided by the employer\
  \ to the employee on a regular or frequent basis, provided that the value of all\
  \ the bonuses in a month does not exceed EUR 13 (Article 39(5)(1) of the Tax Code),\
  \ may, taking into account all the facts and circumstances of the individual case,\
  \ also be excluded from the bonus if the conditions of Article 39(1)(1) of the Tax\
  \ Code or of Article 39(5) of the Tax Code are fulfilled.Bonuses which are not provided\
  \ by the employer to the employee on a regular or frequent basis, provided that\
  \ the value of all the bonuses in a month does not exceed EUR 13 (Article 39(5)(1)\
  \ of the Tax Code), may also be excluded from the bonus. Article 39(3)(b) of the\
  \ Tax Code) and benefits of lesser value provided by the employer to all employees\
  \ on equal terms, such as, in particular, reimbursed meals during work, the use\
  \ of rest and recreation facilities and other similar cases of the provision of\
  \ customary benefits (Article 39(3)(1) of the Tax Code), and benefits of lesser\
  \ value provided by the employer to all employees on equal terms (Article 39(3)(b)\
  \ of the Tax Code). It follows from the above that employer payments for health\
  \ promotion at the workplace, under the current provisions of the Income Tax Code,\
  \ cannot generally be exempted from bonuses or are not considered a bonus only if\
  \ the conditions for exemption under one of the provisions mentioned above are met.2Do\
  \ health promotion measures in the workplace constitute a tax deductible expense\
  \ under ZDT Tax-2?The tax treatment of health promotion expenses depends on the\
  \ assessment of the substance of the expenses in each individual case. Provided\
  \ that the health promotion measures are included in a safety declaration with a\
  \ risk assessment, the expenditure incurred on this basis may be treated as a tax\
  \ deductible expense, subject to the limitations set out in Article 29 in conjunction\
  \ with Article 12 of ZDDPO-2. Expenditure by the employer on the implementation\
  \ of health promotion which does not comply with the above limitations shall not\
  \ be considered as tax deductible expenditure, except in the case of expenses for\
  \ the provision of bonuses and other payments in connection with employment, if\
  \ they are subject to income tax.In determining the tax base (profit) under the\
  \ Corporate Income Tax Act - ZDDPO-2 (Official Gazette of the Republic of Slovenia\
  \ No. 117/06, 56/08, 76/08, 5/09, 96/09, 43/10, 59/11, 24/12, 30/12 and 94/12),\
  \ the expenses identified in the profit and loss account or the annual report corresponding\
  \ to the profit and loss account shall be recognised on the basis of the law and\
  \ the accounting standards introduced in accordance with it, unless otherwise provided\
  \ for in this Law, in accordance with the basic tax principle on the recognition\
  \ of expenses set out in Article 29(1) of the Law on Income Tax, as amended by Article\
  \ 29(1) of the Law on Income Tax. The tax recognition of expenses shall be based\
  \ on the principle set out in Article 29 of the Income Tax Act, which, according\
  \ to the 29th VAT Accounting Principle (Article 29 of the Income Tax Act-2), is\
  \ the tax recognition of the expenses necessary to obtain the income taxed under\
  \ this Act. According to this principle, expenditure which is not necessary for\
  \ the production of revenue is expenditure which, in the light of the facts and\
  \ circumstances, is not a direct condition for the pursuit of an activity and is\
  \ not a consequence of the pursuit of an activity, is of a private nature or is\
  \ not in accordance with normal business practice.Expenditure incurred by an employer\
  \ in carrying out health promotion measures in the workplace, which is not carried\
  \ out in the workplace during working hours and does not arise out of the health\
  \ risks directly linked to the performance of the work, does not normally qualify\
  \ as such under Article 29(2) of the VAT Act. According to Article 30(3)(1) and\
  \ 30(2)(2) of the VAT Act, costs relating to the private life of employees, with\
  \ the exception of costs for the provision of bonuses and other employment-related\
  \ payments, are not tax deductible if they are taxable under the law governing income\
  \ tax. In this connection, Article 35(3) of the ITA-2 provides that bonus expenses\
  \ taxed under the law governing income tax are also to be regarded as other employment-related\
  \ payments. Thus, employer expenses relating to the private life of employees which,\
  \ on the basis of the facts and circumstances of the case, are not taxed as a bonus\
  \ under Article 39 of the Income Tax Code, are not tax deductible as expenses if,\
  \ on the basis of the facts and circumstances of the case, it is apparent that,\
  \ under Article 29 of the Income Tax Code, these payments constitute expenses which\
  \ are not necessary for the purpose of obtaining the income which is taxable.\r\n\
  3. Can an employer deduct VAT from the costs of health promotion?The eligibility\
  \ for VAT deduction depends on the assessment of the substance of the costs in each\
  \ specific case.A taxable person is not entitled to deduct VAT on the basis of invoices\
  \ for costs such as:\r\n- helping to cover the costs of physical exercise outside\
  \ working hours, such as membership fees for sports clubs or leisure centres;\r\n\
  - the organisation of sporting events within the company;\r\n- relaxation courses\
  \ and confidential psychological counselling.However, if the conditions for deducting\
  \ VAT under the provisions of the VAT Act-1 are met, the taxable person is entitled\
  \ to deduct VAT on expenses such as:\r\n- the provision of bicycles for short distances\
  \ within a large working area;\r\n- courses to acquire competences for managing\
  \ work-related stress.The taxable person is entitled to deduct VAT on the cost of\
  \ the following services pursuant to Article 63(1) of the Value Added Tax Act -\
  \ ZDDV-1 (Official Gazette of the RS, No. 13/11-UPB3, 18/11, 78/11, 38/12, 83/12,\
  \ 14/13, 46/13- ZIPRS1314-A)) is entitled to deduct from the VAT which he is liable\
  \ to pay the VAT which he is liable to pay or has paid on the acquisition of goods\
  \ or services, if he has used or will use those goods or services for the purposes\
  \ of his taxable transactions.In respect of goods and services which are needed\
  \ by the taxable person both for transactions in respect of which VAT may be deducted\
  \ in accordance with Article 63 of this Law and for transactions in respect of which\
  \ VAT may not be deducted, only that proportion of the VAT attributable to the former\
  \ transactions may be deducted pursuant to Article 65(1) of the VAT Act. This proportion\
  \ shall be determined in accordance with this Article for all transactions carried\
  \ out by the taxable person.In order to be entitled to deduct, the goods and services\
  \ acquired must have a direct and immediate link with the taxable transactions,\
  \ so that the right to deduct the VAT borne by those goods or services presupposes\
  \ that the cost incurred in acquiring them is part of the cost components of the\
  \ taxable transactions. For this reason, such cost must form part of the cost of\
  \ the outgoing transactions which use the goods and services acquired.The limitation\
  \ of the right to deduct is provided for in Article 66 of the VAT Act, which is\
  \ an exception to the general principle that VAT paid in respect of the purchase\
  \ of goods or services used for the purposes of carrying on a taxable activity and\
  \ certain exempt activities may be deducted from the taxable amount of the tax liability.Article\
  \ 66 of the VAT Act provides that the VAT paid in respect of the purchase of goods\
  \ or services used for the purposes of carrying on a certain taxable activity may\
  \ be deducted from the tax liability. The purpose of this provision is to prevent\
  \ abuses in this area and, in particular, to prevent the final consumption of goods\
  \ or services not subject to VAT. It is also intended to exclude from the right\
  \ to deduct VAT certain categories of expenditure which are not necessarily directly\
  \ linked to the activity of the company or which cannot be regarded as having been\
  \ incurred exclusively for business purposes, even if incurred in the course of\
  \ the company's business.The right to deduct VAT cannot be claimed for the purchase\
  \ of goods or services involving elements of private or final consumption, and therefore\
  \ eligibility for VAT deduction depends on an assessment of the substance of the\
  \ expenditure in each specific case. The limitation of the right to deduct VAT on\
  \ purchases of goods or services for leisure and recreational activities follows\
  \ from Article 176 of Council Directive 2006/112/EC, which provides that expenditure\
  \ which is not clearly business expenditure, such as expenditure on luxury items,\
  \ entertainment or amusement, is not in any event deductible.The limitation of the\
  \ right to deduct VAT on purchases of goods or services for leisure and recreational\
  \ activities also follows from the second point of the Guideline of the 29th meeting\
  \ of the Commission VAT Committee (the 'Guideline'). The purpose of the Guideline\
  \ is to assist Member States in the harmonised implementation and application of\
  \ the Articles of Council Directive 2006/112/EC in national legislation and to help\
  \ businesses with practical aspects. The Guideline is available at: http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/key_documents/vat_committee/2012_guidelines-vat-committee-meetings_en.pdf.\r\
  \nIt follows from the above that if the taxable person does not directly charge\
  \ the costs of carrying out the health promotion, nor are these costs a direct condition\
  \ of the activity and not for strictly business purposes, the right to deduct VAT\
  \ on the costs of carrying out the health promotion cannot be exercised\".\r\nThe\
  \ Explanatory Memorandum is available at the following link:http://www.durs.gov.si/si/davki_predpisi_in_pojasnila/davek_na_dodano_vrednost_pojasnila/od\
  \ bitek_ddv/health_promotion_at_the_workplace/Ministry of Finance:The tax treatment\
  \ of expenditure on health promotion at the workplace depends on an assessment of\
  \ the substance of the expenditure in each individual case. Health promotion expenditure\
  \ may be treated as tax deductible expenditure, subject to the limitations set out\
  \ in Article 29 in conjunction with Article 12 of the Corporate Income Tax Act (Official\
  \ Gazette of the Republic of Slovenia, No 117/06, 56/08, 76/08, 5/09, 96/09, 110/09-ZDAVP-2B,\
  \ 43/10, 59/11, 24/12, 30/12, 94/12, 81/13 and 50/14-ZDDPO-2). Employer expenditure\
  \ on health promotion that does not comply with the above limitations is not tax\
  \ deductible, except in the case of bonuses and other employment-related payments,\
  \ where these are subject to income tax.In determining the tax base (profit) under\
  \ ITA-2, the expenses identified in the profit and loss account or the annual report\
  \ corresponding to the profit and loss account shall be recognised on the basis\
  \ of the law and the accounting standards introduced in accordance with it, unless\
  \ otherwise provided in ITA-2, while, according to the basic tax principle on the\
  \ recognition of expenses set out in Article 29 of ITA-2, expenses necessary to\
  \ obtain the income taxed under this Law shall be tax deductible. In accordance\
  \ with that principle, expenditure which is not necessary for the production of\
  \ revenue is expenditure which, in the light of the facts and circumstances, appears\
  \ not to be a direct condition for carrying on an activity and not to be a consequence\
  \ of carrying on an activity, to be of a private nature or to be inconsistent with\
  \ normal business practice.Expenditure incurred by an employer in carrying out health\
  \ promotion measures at the workplace, which are not carried out at the workplace\
  \ during working hours and do not arise from health risks directly related to the\
  \ performance of the work, generally does not qualify for recognition under Article\
  \ 29 of the Income Tax Code, unless such a specific measure is directly prescribed\
  \ by law.Proposals for changes to the tax legislation are examined by the Ministry\
  \ of Finance in the light of the aims and objectives of tax policy and on the basis\
  \ of an assessment of the situation, together with the financial\r\nimpacts.\r\n\
  \ "
Text file: 514.txt
Title: Health promotion in business
URL: https://www.stopbirokraciji.gov.si/pobuda/?st=514
