Is printing or embroidering work clothing tax deductible?

You want to have work clothing printed or embroidered with a company logo. But are those costs tax deductible? And does it matter whether you choose printing or embroidery? This is a relevant question for many entrepreneurs and employers, especially when it comes to larger orders for the entire team. This article discusses what the rules are for this in the Netherlands.

The short answer: in most cases, printing and embroidery costs are tax deductible. But there are conditions. In this article we explain how that works. Please note: tax rules can change and differ per situation. If in doubt, always consult a tax advisor.

Printing as part of the operating costs

The costs for printing or embroidering corporate clothing are included in the general operating costs. Just like the purchase of the clothing itself, these costs are deductible from the profit, provided they are incurred in the context of the business. The costs must therefore be business-related and related to the business activities.

Always keep the invoices for the printing or embroidery. Also note what the clothing is intended for and who is wearing the clothing. This is important in the event of a possible tax audit, where you must be able to demonstrate that the costs are business-related.

The 70 cm² rule: when does a logo count?

The Tax Authorities state that work clothing with an image of the employer, such as a company logo, is considered tax work clothing. The condition is that the image feature per garment has a minimum total surface area of 70 cm². If the logo is smaller, the clothing may not meet the tax definition of work clothing and the reimbursement may be taxable.

A logo of sufficient size therefore ensures that the clothing is classified as work clothing for tax purposes. This makes both the purchase of clothing and the costs of printing or embroidery deductible. Through the page custom work clothing Tricorp will help you with the options for printing and embroidery on work clothing.

Reclaim VAT on printing

Are you a VAT-registered entrepreneur? Then you can in principle reclaim the VAT on the costs of printing or embroidery as input tax. This applies to both the costs of the clothing itself and the costs of the printing, provided the clothing is used for business purposes.

Make sure that the invoice for the printing is in the name of the company and that the VAT is stated separately. Only then can you reclaim the VAT in your VAT return.

Reimbursement of work clothing to employees

As an employer, you can reimburse or provide printed or embroidered work clothing to employees tax-free, provided that the clothing meets the tax definition. This includes clothing with a logo of at least 70 cm² that refers to the employer. The compensation does not then have to be reported as wages.

If the clothing does not meet the conditions, the compensation can be regarded as wages in kind. In that case, the work costs scheme (WKR) can offer a solution, with an exempt budget available for reimbursements to employees.

Work clothing in many colors, one tax benefit

Whether you choose a solid color or a... bicolor implementation: as soon as the company logo of sufficient size has been applied to the clothing, the clothing meets the tax conditions. The Redefined line from Tricorp is available in many different colors and designs, so that the clothing always matches the corporate identity of the organization. And with a company logo on it, the investment is in many cases also tax deductible.

Go to the website of the Tax Authorities (De Belastingdienst) for more information about tax rules regarding work clothing.