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New rules on meal vouchers for employees

25. 11. 2020 Igor Pieš Life Sciences

We would like to inform you that on Thursday 19 November 2020, the Chamber of Deputies approved the so-called tax package (a law, which amends certain laws in the area of tax and other laws), which should, if the legislative process will be successfully completed, come into force on 1 January 2021. Part of this tax package is the adjustment of the so-called meal voucher tax regime, which aims to increase the number of people using a tax-advantaged subsidy for employee meals, reduce the administration related to contributing to employees‘ meals, and reduce employers tax costs connected to such support (especially costs and fees associated with meal vouchers).

Meal voucher flat rate complements the existing options of tax-advantage benefits provided by the employer in connection with the diet of employees. Newly, employers will be able to provide to employees, besides the company meals or meal vouchers, also subsidy to diet directly and in the form of cash. In addition, such subsidy will be exempt from all taxes on the part of the employee (only up to 70% of the upper limit of the meal voucher that can be paid to employees who are remunerated on a business trip lasting 5 to 12 hours).

According to the current rules, the employer can claim up to 55% of the price of the food or meal voucher provided per shift as a tax-deductible expense. The remaining 45% of the price is paid either by the employee himself or the entire amount is paid by the employer (whereas the mentioned 45% of the price can no longer be claimed by the employer as a tax-deductible expense). This tax-advantaged remains at meal voucher flat rate – however, the employer will now be able to pay off this amount directly to his employee in form of cash.

Similarly, as in meal vouchers, the meal vouchers flat rate has a maximum amount that the employer can claim as a tax-deductible expense. Such limit is 70% of the upper limit of the specified diet provided in connection with a business trip of employee remunerated with a salary, which lasts 5 to 12 hours (the amount of the diet is every year set up by the Ministry of Labour and Social Affairs in the relevant decree). Therefore, if the employer decided to pay off the maximum possible amount of the subsidy to diet, at a situation where there is a 22 working days per month, the maximum amount of the allowance that could be claimed as a tax-deductible expense would be CZK 1,584 per month.

The advantage of the meal voucher flat rate is also the fact that the employee will not have to prove to the employer that the granted subsidy was spent on lunches. Therefore, the employer will not arise the costs related to the obligation to control the use of the provided subsidy.

More information about the meal voucher flat rate you will also find in the statement of the Ministry of Finance of the Czech Republic: https://www.mfcr.cz/cs/aktualne/tiskove-zpravy/2020/prehledne-co-prinasi-stravenkovy-pausal-39391.

Mgr. Igor Pieš partner

igor@kastnerpies.cz