Throughout this pandemic, the numbers of employees to perform their work at home instead of in the employer’s premises are increasing. This can even happen on a large scale in the future. Because of this, there is an issue to be clarified on what applies if the employer buys office furniture, or other office material, which is placed in the employee’s home.
One of the companies has requested a prior notice from the Tax Court and requested an answer as to what applies to the right to deduct VAT if office employees on behalf of the company buy a desk and desk lamp to be used for work in the home. According to the conditions for the advance notice, it is the employee who is invoiced for the purchases and is liable to pay to the supplier.
According to the Tax Law Board’s assessment, in the case in question there is no right to deduct VAT (decision 2021-07-08, 2-21 / I). One of the members expressed a dissenting opinion and said that there was a right to deduct.
According to the conditions for the advance notice, the invoice would not be issued to the company but to the employees. In fact, it was the employees who would be liable to pay to the supplier. Because of this, it was not considered an expense on behalf of the employer. In principle, the employees were thus considered to have bought the furniture and then sold it on to the company. And since the employees were not liable for VAT, there was no right to deduct for the company.
Who is the real acquirer should therefore be examined on the basis of an overall assessment of several circumstances. However, who is responsible for payment should be a very important circumstance in this assessment. The question that the Supreme Administrative Court is likely to be faced with is therefore whether there are other circumstances that can weigh as heavily or possibly heavier.
Hopefully, the pandemic will subside and simplify the administrative handling of purchasing. This can also make it easier to enter into agreements with the employees where the employer, instead of the employee, becomes liable for the purchases. In that case, it would solve the problem if the Supreme Administrative Court were to determine the preliminary ruling.
It would be strange if the employer could not bear the cost of office furniture placed in the home if it can be shown that the employee works some time at home. Especially in light of the fact that the employer is responsible for the employee’s workplace, even if the work takes place in the employee’s home.