Fiskus changes his head about accounting for dog costs in the office

According to the latest explanation of the IRS, the owner of the company, who plans to settle the costs associated with the dog guarding his cabinet, will only gotta take part in any of these expenses as gross costs. The earlier fiscal position, which allowed full account to be taken of the costs associated with dogs protecting the office, has now been changed, ordering the distribution of expenditure on company and private purposes.

This situation came from the question of the entrepreneur, computer discipline operating at home. His cabinet contains computer equipment, specialized software and crucial documents, and during trips to contractors this property remains unsupervised. For this reason, the entrepreneur would like to get a dog that would service as a guardian for the cabinet, at the same time having a possibly beneficial impact on client relations.

However, Fiscus did not let the full inclusion of the costs associated with the dog in the taxation settlements. He stressed that only those expenditures which are straight related to the activity can be regarded as gross costs. He besides stated that dog spending must not be accounted for in the part in which it is utilized for private purposes.

The IRS requires the entrepreneur to show in what part of the expenditure related to the dog is related to the activity. Despite the deficiency of circumstantial indications on whether to keep records of the time the dog spends on guarding the company, the entrepreneur is obliged to present specified a relationship. Ultimately, the author of the article suggests that the entrepreneur can accept a reasonable proportion, e.g. 50%, and usage it as a basis for cost accounting.

It is worth noting that earlier interpretations of the taxation did not require entrepreneurs to share the costs associated with dogs. Examples include the situation of an accountant guarding an office at home or a driver travelling with a dog to defend the goods transported. Previously, the IRS had no objection to taking into account the costs associated with the assistance dog in psychiatric classes.

Interpretation No: 0112-KDWL.4011. 75.2023.1.WS

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Daniel Głogowski

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