Crowe news

Meal vouchers and home office

Is it possible?

Andrea Kleinová
24/04/2020
Crowe news

Changes in relation to the pandemics have affected us in all areas of life, both in the private and the business sphere. Many companies had to shut down their plants and shops completely in accordance with the newly introduced law, while others significantly reduced their production. However, some of them continue to work.

Nevertheless, the closure of schools and social distancing efforts in order to slow down the epidemic have brought many changes in day-to-day operations also in these cases. Where possible, work in the home office regime has been introduced.

In the context of the introduction of this regime, number of practical problems and questions have arisen. One of them is whether the employees working from home are entitled to meal vouchers and whether these costs are tax deductible on the employer's side.

It should be emphasized that provision of meal vouchers (or related contribution) is a voluntary employee benefit that the employer can, at its discretion, provide to all its employees, including those who are allowed to work in the home office mode. The entitlement to a meal voucher therefore arises only if the employer undertakes to do so, for example in an internal regulation or in an employment contract or other separate agreement with the employee.

So, what about the tax implications?

The meal voucher is considered to be a non-monetary supply within the framework of the meals during work time, secured by other entities and thus, from the employee's point of view, it is an income exempt from personal income tax, regardless of its amount.

However, in terms of tax deductibility of meal voucher costs on the employer's side, the situation is more complicated. In accordance with the Income Tax Act, an allowance provided to the employees on meals secured through other entities, including meal vouchers, can also be considered as tax deductible, provided that the following conditions are met:

  • the amount of the contribution does not exceed 55 % of the price of the meal (i.e. 55% of the value in case of a meal voucher) and at the same time 70 % of the basic meal allowance defined by the Labour Code for civil servants for a business trip lasting between 5 to 12 hours;
  • employees are not entitled to meals allowances under the Labour Code; and
  • the employee's presence at work during a specific shift lasts at least 3 hours.

The fulfillment of the last condition is especially problematic when working in the home office mode. The Labour Code states that the employment relationship of an employee who does not work in the workplace of the employer and who performs the agreed work during working hours, which he / she schedules himself / herself, are not subject – beside others - to working hrous arrangements. Since the employer cannot schedule working hours to the employee working in the home office regime and thus, to determine the beginning and end of the shift, it is also not possible to check the adherence to its length. Therefore, the condition of the shift in the length of at least three hours cannot be fulfilled.

However, the time and its demands are changing, and so do the laws or their interpretation and application. This situation was also one of such cases. Already at the end of 2019, the General Financial Directorate expressed the view that the decisive factor in assessing the tax deductibility of meal voucher costs in the case of the home office was whether or not the employees concerned could be assigned to the shits. If it is possible, the costs of meal vouchers can also be considered tax deductible.

Thus, to ensure tax deductibility of meal vouchers provided to employees for home office work, it is advisable to agree not only specific tasks or agenda to be done, but also a work shift.

Practical and proved approach is to agree a mandatory part of working hours, when an employee is required to be available for communication with other team members, other co-workers, suppliers, or customers. The rest of working hours can be then scheduled by employees themselves according to their needs and priorities. However, do not forget that the required mandatory working time must be at least three hours.

Should all the above be fulfilled, there is no need to worry about the eventual tax non-deductibility of meal vouchers for employees at the home office. However, should you have any doubts, do not hesitate to contact us.

Author

Andrea Kleinová
Andrea Kleinová
Tax Manager
Crowe