Telework taxation: what implications will it have for your business?

With the coronavirus pandemic, telework has definitely been implanted in our country. A working formula that promotes the reconciliation of working and professional life, and that helps to avoid contagion and keep the Covid-19 at bay.

Given the boom it has had during the pandemic, the new Telework Law has been created to regulate this modalityof work, which entered into force on 13 October 2020. A law that states that work must be voluntary and reversible, as well as that the standard will not apply in exceptional situations such as a pandemic.

In addition, the new regulations stipulate that the cost of the equipment and expenses incurred in teleworkwill be borne by the company, which will also be responsible for providing and maintaining to workers all necessary equipment and tools.

And in this situation doubts arise about the taxation of telework and its implications for your company,and in this post we will try to solve them. If you have a company and have implemented telework, you are interested in this.

Telework taxation: how will it affect the company?

With the publication of this new regulation, doubts about the taxation of telework for companies are innumerable. Is it necessary to tax workers’ equipment and computers? What about mobile phones? What taxation does the payment of the light or Internet of the workers have? What are the costs of teleworking for an SME?

Here it should be made clear that the material provided by the company for teleworking will not be considered as remuneration in kind for the worker,since it will remain the property of the company. If the material were to become the worker’s property, it would be considered as remuneration in kind, and would therefore be included in wage yields.

This means that the accounting and tax treatment of this material will be the same, regardless of wither it is used for work in the company’s own facilities or at the workers’ home.

In any case, to establish correctly the taxation of telework, it is necessary to analyze the conditions of the transfer or delivery, both of use and purpose, takinginto account what is agreed by collective agreement or in the agreements of the companies.

That said, it is a mistake to compare its tax implications with that of buying company cars. Company vehicles are a payment in kind in that they are used for a particular use, unlike for example cars, vans or motorcycles used by dealers.

Tax implications of payments to cover telework expenses

Apart from the taxation of the costs incurred in the transfer of equipment and tools, and whether or not it is remuneration in kind, it is also necessary to analyse the payments of companies in order tocover electricity or Internet costs. According to the collective agreement, many companies will give extra remuneration to teleworkers to cover expenses arising from working from home.

Such expenses can be agreed without the worker justifying them as expenses. What should be regulated are the circumstances in which these expenditures are considered a higher remuneration or not for tax purposes, which will be borne by the Directorate-General for Taxation.

The reality is that the telework modality has been implemented and is on track to settle in our country, which it expects that the IRPF regulatory rules will soon be a change to include those amounts that would be exempt from taxation in these cases, and thus give greater tax certainty to these types of minor expenses, the exempt threshold of which will affect the negotiation between employers and workers’ representatives.

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The news that comes with the new Telework Law that you must knowabout.

If you have any doubts regarding the taxation of telework in your company, the tax and working advisors of AYCE Laborytax are at your disposal to inform you, advise you and solve any kind of doubt about it.