--- title: Tax risks when using sports allowance date: 2019-09-13T13:36:17Z modified: 2025-01-16T10:59:31Z permalink: "https://grow.ee/sporditoetuse-kasutamil/" type: post status: publish excerpt: "" wpid: 5897 featured_image: "https://grow.ee/wp-content/uploads/2019/09/Grow-Finance-Sporditoetus2-scaled.jpg" timestamp: 2025-01-16T10:59:31Z tags: - Accounting --- From January 1, 2025, it is possible to make expenses of up to 400 euros per employee per year to promote employee health, if the employer has made them available to all employees. Tax-free sports allowance is an excellent opportunity to promote health and support athletic lifestyles. However, the limitations of sports subsidies and the little things that turn sports subsidies into special benefits are often forgotten. First, it is worth clarifying the basic issues, who sports subsidies are intended for, how much and how sports subsidies are paid and further declared. ### WHO IS SPORTS SUBSIDY FOR?** All Estonian companies, foreign branches and permanent places of business, state and local government institutions can apply sports subsidies to their employees. The employer must provide the benefit to all employees, regardless of position and workload. It is also worth briefly explaining who is considered an employee in the case of sports subsidies. An employee is: - an employee with an employment contract; - a natural person working or providing a service on the basis of a contract of employment, agency or other contract under the law of obligations; - a member of the management board or supervisory board; - a state official; - a sole proprietor who sells goods to the employer for a period of more than six months. ### **HOW MUCH IS THE SPORTS BENEFIT?** The limit is up to 400 euros per employee per year. **The amount cannot be distributed to other employees of the same employer or shifted to the next accounting period.** If the employee has not used the benefit in the correct period, it will not be counted in the next period. The amount allowed for the benefit is inclusive of VAT and the input VAT part cannot be counted back in the accounting. ### **HOW DOES THE SPORTS BENEFIT WORK?** It is necessary to keep records of how much specific employees use the tax exemption in order to have a clear overview of how much the employee can still use the tax-free amount of the sports benefit in one year. If the amount exceeds the 400 euro limit in one year, the exceeded part must definitely be reflected as a special benefit. There must also be the corresponding original documents that prove the expense and that can be used to distinguish that it is definitely a tax-free sports benefit. Often, a copy of the payment order made to the sports club is sent to the employer, which is not a proper document. In addition, it is important to remember that the benefit is personal and the employee can only submit documents of expenses incurred to promote his or her own health. The sports benefit report must be submitted once a year by February 1 - declaration INF 14. ## **What is included in health promotion expenses and what is a special benefit?** The law sets out several different health promotion-related expenses as separate points, which are not described in detail and may still cause confusion among both employees and entrepreneurs. Often, the specifics of the expenses incurred are not explored in depth and the concept of tax-exempt sports expenses is overly generalized. We bring you some common tax-exempt sports expenses and how they can be confused with a special benefit. - ### Participation fee for a public public sports event Only public public sports events are permitted, where anyone can participate. Public sports events include various public events and series of events: Tallinn Marathon, SEB May Run, Tartu Marathon, and so on. Sports events organized by a certain sports club, such as various sports camps, are considered fringe benefits. In addition, sports days organized by a company also fall under fringe benefits. It is always worth consulting with an accountant to see whether the planned sports event is still eligible for tax-free sports support. - ### Expenses directly related to the regular use of a sports or exercise facility This includes both public sports clubs and the company's own sports clubs, the costs of which are borne by the employee or reimbursed to the employee based on an expense document. **Sports clothing, footwear, and equipment cannot be reimbursed tax-free**. Short-term rental of a sports complex by the employer is also not included. If the employer still decides to reimburse them to the employee, then it is a fringe benefit. - ### Expenses incurred for the maintenance of the employer's existing sports facilities The tax benefit extends to expenses incurred for the maintenance of the employer's existing sports facilities (excluding investments), with a limit of 400 euros per employee per year and can be used for employees who use the employer's sports facilities. Expenses for which the tax benefit may be applied include, for example, utility costs of the sports facility, improvement works and other administrative costs. However, if the company wants to build a completely new sports building, these costs are not included in it, they are taxed with income tax instead. - ### Expenses incurred for health promotion From 2025, expenses for services provided by a person with a health service provision license within the framework of dental care, rehabilitation, psychological treatment, physiotherapy or speech therapy are allowed. The list of services has also been added to the list of services from 01.2025, including a nutritional counseling service provided by a qualified nutritionist and expenses directly related to massage. **Body treatments or other beauty treatments are not included in the tax exemption**. - ### Health insurance premium An employee can be compensated for payments to a voluntary health insurance contract with insurance companies within the limit. A very reasonable solution for both the employer and employees to manage health promotion costs is the Stebby environment. Grow is constantly working to ensure that our accountants keep up with the times and we have also reflected the values that a good accounting service should be based on in our blog. We see ourselves as pioneers in our field and are the first[ 100% paperless accounting office](https://grow.ee/wp-content/uploads/wp-mfa-exports/page/ettevottest.md) in Estonia. If you would like to be part of the forward-looking [online accounting service](https://grow.ee/services/raamatupidamine/) today, contact us via our website, send an e-mail to või hoopis helista numbril 5629 3090!