SALE OF COMMERCIAL GOODS BETWEEN SPOUSES' COMPANIES

Separate economic activities of the spouses

The law allows for the registration of separate economic activities by a husband and wife - it does not matter in this case whether there is statutory joint property between the spouses.

Also, the act on personal income tax stipulates that spouses are generally subject to separate taxation from their income, and the tax law only allows them to jointly make an annual settlement.

Sale of commercial goods between spouses' companies

The law does not prohibit transactions between related parties, including between spouses' companies. Consequently - the sale of commercial goods to the spouse's company will be subject to taxation and records on general principles.

The Personal Income Tax Act in Art. 25 specifies that:

Art. 25:

if, as a result of such relationships, conditions are established or imposed that differ from those that would be established between independent entities and, as a result, the taxpayer does not report income or shows income lower than that which would be expected if the above-mentioned relationships did not exist - the income of the taxpayer concerned and the tax due is determined without taking into account the conditions resulting from these connections.

Important!

When selling commercial goods to the spouse's company, remember not to lower prices, but use the one for which we sell to ordinary, unrelated contractors.

The Act on tax on goods and services provides for the undercutting of prices in the case of relations between contractors:

Art. 32 sec. 1 and 3 of the VAT Act:

1. Where there is a relationship between the buyer and the supplier of goods or the service provider, as referred to in para. 2, and where the remuneration is:

lower than the market value, and the buyer of the goods or services does not have, in accordance with Art. 86, art. 86a, art. 88 and art. 90 and with the regulations issued on the basis of art. 92 sec. 3 full right to reduce the amount of tax due by the amount of input tax,

lower than the market value, and the supplier of goods or service provider does not, in accordance with Art. 86, art. 86a, art. 88 and art. 90 and with the regulations issued on the basis of art. 92 sec. 3 full right to reduce the amount of tax due by the amount of input tax, and the supply of goods or services is tax-exempt,

higher than the market value, and the delivering goods or service provider does not, pursuant to Art. 86, art. 86a, art. 88 and art. 90 and with the regulations issued on the basis of art. 92 sec. 3 of the full right to reduce the amount of tax due by the amount of input tax

- the tax authority determines the tax base in accordance with the market value, if it turns out that this relationship influenced the determination of the remuneration for the supply of goods or services. (...)

3. Through family ties referred to in par. 2, means marriage and kinship or affinity to the second degree.

Sales between spouses - purchase of goods

If it is already known that the law allows the sale between spouses under certain conditions, including the sale of commercial goods, can this purchase constitute a tax deductible cost in the company of the spouse who buys them?

According to Art. 22 sec. 1 of the Personal Income Tax Act, in order for an expense to be considered a tax deductible cost, it must be incurred in order to achieve income or to maintain or secure a source of income, with the exception of the costs listed in Art. 23.

Art. 23, however, does not mention the costs of purchasing commercial goods, so such a purchase may constitute a tax deductible cost, even if the goods were purchased from a spouse.