Refund of the pension and disability pension contribution from PFRON as taxable income


Disabled persons running their own business may apply for the reimbursement of pension and disability pension contributions from the State Fund for Rehabilitation of Disabled Persons (PFRON). Similar help can be used by employers employing disabled people in their plant. The method of accounting for the funds received for reimbursement depends on whether the previously paid contributions have been classified as tax deductible costs or not.

What reimbursement of contributions from PFRON can be counted on?

The reimbursement of old-age and disability pension contributions may amount to, respectively:

  • 100% of the total amount of contributions for severely disabled people,
  • 60% - for a moderate degree,
  • 30% for a light degree.

As a rule, the reimbursement of contributions is transferred to the bank account.

An entrepreneur receiving this type of aid from PFRON must remember that, in accordance with the regulations, it is subject to income tax.

Contributions in tax deductible costs and reimbursement from PFRON

Pursuant to Art. 14 sec. 2 points 2 of the Personal Income Tax Act, the entrepreneur's income also includes subsidies, subsidies, subsidies and other gratuitous benefits received to cover costs or as a reimbursement of expenses, except when these revenues are related to the receipt, purchase or production of fixed assets on their own or intangible assets.

In connection with the above, if the entrepreneur has included the paid pension and disability pension contributions as tax deductible costs, the amount from PFRON reimbursement is required to be recognized as income. In such a case, it should be included in column 8 of the revenue and expense ledger and taken into account when calculating the advance on income tax.

In the event that the taxpayer accounts for income tax on the basis of a recorded lump sum, he should tax the income from PFRON refund at the rate of 3% - in accordance with art. 12 sec. 1 point 5 lit. e of the Act on flat-rate income tax on certain revenues earned by natural persons.

Contributions deducted from income

By paying the pension and disability pension contributions, the taxpayer may also deduct the expenses incurred for this purpose from the income. Receiving a refund of the amounts allocated for the contribution will make the entrepreneur be obliged to comply with Art. 45 sec. 3a of the PIT Act. According to it, expenses deducted from the income for which the taxpayer has received a refund should be added again when generating the annual declaration for the year in which the above-mentioned events took place.

A taxpayer using a registered lump sum behaves in a similar way - in accordance with art. 21 sec. 2 lit. and the above-mentioned the Lump-sum Income Tax Act.