From January 2022, meal vouchers will lose their tax advantage and become equal to the financial contribution

Barbora Palenikova

On Tuesday, the Parliament approved a draft amendment to the Labour Code concerning the equal taxation of various forms of provision of meals to employees. There is no change to the taxation of financial contributions, but the changes will affect meal vouchers, which have not been taxed at all so far.

In this article, you will find out how meal vouchers and employee meal contributions will be taxed from January 2022 onward.

Changes compared to the original wording of the amendment to the Labour Code

The original draft of the amendment to the Labour Code envisioned the equalisation of various forms of providing meals to employees, namely that employers should be given the opportunity to contribute to employees' meals up to 100% of the amount of the meal allowance (provided during a working trip lasting 5 to12 hours). However, this proposal has been completely discarded.

The solution of retrospective payment of meal allowances has also been abandoned. Thus, it remains the case that it is necessary for the employer to ensure that both the meal vouchers and the financial contribution for meals are provided to the employees in advance, at the latest on the day the meals are provided. Failure to do so would constitute a breach of the statutory conditions under the Labour Code. Violation of these legal conditions may have negative tax consequences for both the employee and the employer (for more information, see our article "How to set up the provision of a meal allowance without additional taxation", under "Beware of paying allowances retrospectively - the expenses will not be tax deductible").

The equalisation of the different forms of provision of meals to employees has been translated into a change in the taxation of meal vouchers

In the approved amendment to the Labour Code, there has been a change in the taxation of meal vouchers, i.e. catering vouchers, which will no longer be fully exempt from tax, but will be subject to a tax exemption threshold of up to the same amount as the financial contribution for catering, i.e. a maximum of EUR 2.81 (55% of EUR 5.10 - the value of meals provided on a business trip of 5-12 hours according to the Measures on the Amounts of Meal Allowances).

In practice, the equalization of the taxation of different forms of providing meals to employees will be such that neither the meal voucher nor the financial contribution for meals will be taxed up to the amount of EUR 2.81. The provision of meals beyond the scope of the Labour Code, which is not financed from the social fund, will be taxable income of the employee, which will be subject to both taxes and levies. The statutory employer's contribution and the social fund contribution will continue to be exempt from taxes and contributions.

Abolition of the obligation to provide proof of meal allowances

A positive change is that sole traders will no longer have to document the amount of the cost of the meal or meal voucher in the form of a tax document. They can include the amount of the meal voucher in their tax expenses, up to a maximum of EUR 2.81 for each day worked, without any documentation, which removes a significant administrative burden for entrepreneurs for relatively small amounts.

From 1 March 2020, employees can choose (if their employer does not provide them with meals in a catering establishment) between food vouchers (meal vouchers) and a financial contribution towards meals. Whether the employee chooses a meal voucher or a meal allowance, meal allowances up to EUR 2.81, i.e. 55% of the value of the meal allowance, will not be taxable from 1 January 2022.

If you are wondering how best to set up catering for your employees, we will be happy to advise you.