Lunch for employees - Questions about deductibility
October 12, 2010 | 25,00 EUR | answered by Michael Herrmann
Following questions:
I have 2 employees and we have now tested a menu service and I would like to offer 2 options here.
Option 1 (I am still considering how much I can subsidize):
Once a week, we would like to have a meal together during a meeting (weekly review and planning). I have thought about it like this.
For example, the meal costs 5.40 EUR including VAT (I receive the invoice once a week). I deduct this as operating expenses. If I fully cover the cost of the meal, should I be able to fully deduct it?
What if I only subsidize part of the cost and the employee is supposed to pay an additional 2 EUR, for example. Do I need to invoice the employee for this (including VAT)? Or can I simply deduct the 2 EUR from their net salary?
Option 2:
Employees should be able to order the meal on request. Billing will be done once a month. Do I need to invoice the employee here as well? Due to VAT? Or can I simply deduct the amount from their net salary?
Can I offer the meal at a lower price here without any issues. For example, if I pay 5.40 EUR for 5 EUR?
If there are better or more correct tax options available, I would appreciate any tips.
Thank you.
Best regards.
Dear inquirer,
First of all, thank you for your inquiry, which I would be happy to answer based on the information provided and in the context of your initial consultation. The response is based on the facts presented. Incorrect or incomplete information regarding the actual circumstances can affect the legal outcome.
The provision of discounted meals as benefits in kind has VAT and income tax consequences.
The benefit (meal) provided to employees is considered income and must therefore be subject to income tax and social security contributions. The benefit is generally calculated as the difference between the cost of the meal and the employee's contribution. This applies regardless of who orders the food.
If meal vouchers are distributed, and their value does not exceed the official benefit-in-kind value of currently 2.57 euros by more than 3.10 euros, only the benefit-in-kind value is treated as income.
However, it is more practical to use the tax-free allowance of 44 euros per calendar month and employee. Benefits in kind up to 44 euros are flat-rate tax and social security contributions free. If the limit is exceeded, the total amount will be taxable again.
It is important to carefully document the benefits provided to employees.
If meals are provided to employees free of charge or at a reduced price, they are considered VAT-free value transfers, which are subject to VAT based on the cost incurred.
I hope that these explanations have given you a sufficient overview of the situation in the context of your inquiry and remain
Sincerely,
Michael Herrmann
Graduate in Financial Management
Tax Advisor
