{"id":242360,"date":"2020-11-05T16:53:00","date_gmt":"2020-11-05T15:53:00","guid":{"rendered":"https:\/\/highgate.sk\/can-i-put-an-expensive-watch-in-my-expensestax-optimisation-in-practice\/"},"modified":"2025-03-23T23:28:27","modified_gmt":"2025-03-23T22:28:27","slug":"can-i-put-an-expensive-watch-in-my-expensestax-optimisation-in-practice","status":"publish","type":"post","link":"https:\/\/highgate.sk\/en\/can-i-put-an-expensive-watch-in-my-expensestax-optimisation-in-practice\/","title":{"rendered":"Can I put an expensive watch in my expenses?\nTax optimisation in practice."},"content":{"rendered":"\n<p><strong>Almost every one of our tax and accounting clients is dealing with dilemmas about what they can and cannot include as a tax expense.\nWill the tax office allow my watch, handbags or clothes?\nSometimes yes, sometimes no.  <\/strong><\/p>\n\n<p>I don&#8217;t necessarily have to be an attorney or a financial advisor.\nAfter all, every entrepreneur may have some legitimate reason why they need a more expensive watch (or purse) to conduct their business.\nBut is it legitimate enough?  <\/p>\n\n<p>For example, the courts have dealt with a case concerning the procurement of spectacles by a crane operator who had an eye defect.\nIn that case, the court did not consider such a cost to be a tax expense because the crane operator would have had to acquire the glasses anyway. <\/p>\n\n<p>However, what if any regulations require the taxpayer to acquire an item to which the associated cost may be a personal necessity?\nFor example, the internal rules of the Slovak Bar Association require attorneys to maintain a dignified appearance.\nFor women, this means wearing a skirt or trouser suit, blouse, dress and dress shoes appropriate to the season.\nAnd, in turn, male attorneys must wear a men&#8217;s suit.\nAnd supposedly airline pilots must have a second pair of goggles purchased.    <\/p>\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe title=\"Pre\u010do robi\u0165 \u00fa\u010dtovn\u00edctvo s nami\" width=\"800\" height=\"450\" src=\"https:\/\/www.youtube.com\/embed\/Y5QyWX1NJXY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n<h3 class=\"wp-block-heading\"><strong>Are party clothes or glasses a tax expense in such cases?<\/strong><\/h3>\n\n<p>If I&#8217;m a professional athlete, I need a special watch to perform my activity.\nHowever, it can always be argued that I would buy a special watch even if I were not a professional athlete.\nBut can the tax authorities thus lump any expenditure on the acquisition of property which may be of a personal use as a tax expenditure?\nIf so, what about mobile phones or laptops?\nAnd what if I use my car to take care of private business while I am travelling for work?    <\/p>\n\n<h3 class=\"wp-block-heading\"><strong>So can I put the watch in my tax expenses?<\/strong><\/h3>\n\n<p>In most cases, especially for office-based professions, the use of <strong>smart watches<\/strong> can be justified, for example, because of the handling of sms, time records, navigation and other functions that are practical for business.\nIt is the same as with a mobile phone.\nIf we questioned the purposefulness of such an expense, we could, after a while, discuss whether everyone needs a colour printer, the latest iPhone and so on.  <\/p>\n\n<p>But what about <strong>luxury watches<\/strong> (like handbags) bought to impress in order to attract customers?\nHere it looks like &#8220;representation&#8221;, which is not recognised as a tax expense by default.\nHowever, there are other types of &#8220;representations&#8221; that are recognised as a tax expense.\nWhy can an upscale office space (i.e., location, classification, or reception desk appearance) be recognized as a tax expense and a luxury watch is not?\nAfter all, we don&#8217;t primarily need both &#8220;representations&#8221; for the business?    <\/p>\n\n<p>Luxury watches build an image just like expensive leather sofas, designer desks and suits.\nAnd in that case, in principle, the cost of acquiring them should be treated as a tax expense. <\/p>\n\n<h3 class=\"wp-block-heading\"><strong>To summarise, we can come to the following conclusions<\/strong><\/h3>\n\n<p>If the following conditions are met, the cost of the luxury watch should be treated as a tax expense:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>it can be demonstrated that such a standard is necessary in order for the taxpayer, for example, to gain the confidence of certain clients if the taxpayer works in an industry where a certain standard is expected and the absence of such a standard will diminish that confidence; and<\/li>\n\n\n\n<li>it is satisfactorily explained that such equipment is not used privately (e.g. by storing the watch in a safe after work and demonstrating that the taxpayer owns a company watch for non-business purposes, etc.)<\/li>\n<\/ul>\n\n<p><strong>And if I shy away from proving it to the tax office, I can still take advantage of claiming the 80%-20% expenses.\nAnd then what about the VAT deduction?\nAbout this can be personally or    <\/strong><a href=\"https:\/\/highgate.sk\/nase-kurzy-a-skolenia\/\"><strong>on one of our videos, where we also cover these topics<\/strong><\/a><strong>. <\/strong> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Almost every one of our tax and accounting clients is dealing with dilemmas about what they can and cannot include as a tax expense. Will the tax office allow my watch, handbags or clothes? Sometimes yes, sometimes no. I don&#8217;t necessarily have to be an attorney or a financial advisor. After all, every entrepreneur may [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":247051,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[134],"tags":[94],"class_list":["post-242360","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interesting-topics","tag-tax-optimisation"],"_links":{"self":[{"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/posts\/242360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/comments?post=242360"}],"version-history":[{"count":4,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/posts\/242360\/revisions"}],"predecessor-version":[{"id":244457,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/posts\/242360\/revisions\/244457"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/media\/247051"}],"wp:attachment":[{"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/media?parent=242360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/categories?post=242360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/tags?post=242360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}