Office, coworking and home-office costs are tax deductible when they genuinely relate to the company’s business. Rent and utilities reduce the tax base gradually, small equipment goes straight into expenses and pricier assets are depreciated. Both Slovakia and the Czech Republic follow the same logic, but the thresholds and one timing rule differ.
What counts as an office cost?
Office running costs cover everything a company needs to actually work in a space – rent, utilities (electricity, gas, water, heating), internet and phone, cleaning, security, consumables and equipment such as desks, chairs, computers or a printer. What matters is not the form of the expense but its link to earning, securing and maintaining taxable income. In Slovakia this follows Section 19 of the Income Tax Act, in the Czech Republic Section 24 of the Czech Income Tax Act.
This is where businesses most often slip. If you set up an office that also serves as the family living room, the tax authority will examine how much of the cost truly relates to business. For mixed-use space we recommend splitting the cost by a ratio you can defend – for example, by the floor area used exclusively for work.
How do rent and utilities work?
Rent is a typical operating cost, but Slovakia adds one condition. Where the landlord is an individual, the rent is deductible only once it is actually paid (Section 17(19) of the Slovak Income Tax Act). Unpaid December rent therefore does not enter that year’s costs even if you hold the invoice. The Czech rules have no such payment condition for companies keeping accounts – rent simply belongs to the period it relates to.
Utilities follow the period they concern in both countries. With advance payments for energy, only the real consumption after the annual settlement becomes a cost. If you are weighing office costs against your overall financing, see our note on choosing between a structured tax approach for your company.
When is equipment an expense and when is it depreciated?
The entry price of a single item decides. In Slovakia, tangible assets up to 1,700 EUR (intangible assets such as software up to 2,400 EUR) can go straight into costs in the year of purchase. In the Czech Republic the threshold is much higher – 80,000 CZK, and the same 80,000 CZK limit applies to technical improvements of the premises.
Above these limits the item becomes a fixed asset and the cost is claimed gradually through depreciation over several years, based on its depreciation group. Example: a desk costing 900 EUR (or 20,000 CZK) is expensed immediately, while a furniture set worth 2,500 EUR (or 120,000 CZK) is depreciated over several years.
How does coworking work?
Coworking is convenient for tax – you pay for a service, not for renting real estate. The monthly fee for a desk or meeting room is a full operating cost of the period it relates to, with no equipment depreciation or utility settlement to handle. Smaller firms and single-owner companies value this because they do not tie up cash in fitting out an office.
Home working is trickier. A director working from their own flat can rent the space to the company or be reimbursed a proportional share of costs – always on the basis of a contract and a provable calculation. Without documentation such an expense will not survive a tax inspection in either country.
When can you deduct VAT on office costs?
If the company is VAT-registered, it can deduct VAT on most office running costs – utilities, internet, coworking and purchased equipment – as long as the space serves taxable business and a proper tax document exists. Renting real estate is the exception: it is generally VAT-exempt, but the landlord may opt to tax a lease to another VAT payer, after which the tenant can deduct the VAT. For mixed use, the deduction is reduced.
The mechanics are near identical in both countries because VAT is harmonised across the EU. The difference lies mainly in the domestic income-tax thresholds and in Slovakia’s payment condition for rent from individuals.
What mistakes do companies make?
The most common error is claiming the full rent of a flat used mainly for living, or buying equipment “for the company” that the family actually uses. The second trap is timing – in Slovakia forgetting the payment condition for rent from individuals, and in both countries treating energy advances as an immediate cost.
The third issue is missing documentation. Without an invoice, a lease or a usage-ratio calculation, the expense loses its defensibility. Keeping a running overview of operating costs – this is where reliable professional accounting earns its keep – and, for mixed use, preparing a splitting method you can explain to an inspector will save you trouble later.
Not sure how much of your office costs your company can really claim? We will set up your operating costs so they hold up under inspection.
FAQ
Can I deduct the full rent of the flat I work from?
No, not if the flat is used mainly for living. Only the proportional part relating to the space and time genuinely used for business belongs in costs. You should be able to prove this ratio, for example by the floor area set aside for work. The full rent of a residential flat would not survive an inspection in either country.
Up to what amount can I expense office equipment immediately?
In Slovakia, tangible assets up to 1,700 EUR per item can be expensed in the year of purchase; in the Czech Republic the limit is 80,000 CZK. Above these amounts the item becomes a fixed asset and is claimed gradually through depreciation. For intangible assets such as software the Slovak limit is 2,400 EUR.
Is the rent rule really different in Slovakia and the Czech Republic?
Yes, for one detail. Slovakia only allows rent as a cost once it is actually paid when the landlord is an individual (Section 17(19)). Czech companies keeping accounts have no such payment condition – rent belongs to the period it relates to. Utilities and VAT treatment are otherwise very similar in both countries.