Therefore, we explain below the tax treatment that should be applicable to this type of vouchers that are granted by Romanian companies to their employees. Specifically, we explain, according to the Romanian tax provisions in force, how should the expenses related to meal vouchers be treated at the level of the company that purchases them from an authorized issuing agency, but also the applicable tax treatment for these benefits in kind at the level of the employees that receive them.
Tax treatment applicable to meal vouchers at company level
According to the general rule of deductibility of expenses for the calculation of the profit tax, as provided by the Romanian Tax Code (i.e., Law no. 227/2015, Art. 25 on expenses), expenses are deductible as long as they are registered for the purpose of carrying out the economic activity of the company.
In addition, the legal provisions state as a general rule for the type of salary and salary-related expenses that they are deductible expenses when calculating the corporate income tax due by a company. However, the Romanian Tax Code also provides for some exceptions to the deductibility of salary expenses (under Art. 25, paragraph 3, letter c, of the Tax Code), including deductibility of expenses representing meal vouchers granted by employers to their employees, as per the specific law regulating such vouchers.
From the mention “as per the specific law regulating such vouchers” it results that the above provisions of the Tax Code must be corroborated with the provisions of Law no. 165/2018 regarding the granting of value vouchers.
Thus, we can conclude that the costs corresponding to meal vouchers are deductible when calculating the company’s profit tax, within the maximum nominal value established as per the provisions of Law 165/2018, and applicable for the period in which the vouchers are granted.
Regarding the manner of granting the vouchers, according to the provisions of the same law, meal vouchers must be distributed by an employer who choses to grant them to employees on a monthly basis, in the last decade of each month, for the following month. Also, the number of meal vouchers that the employer can distribute to each employee must be equal to the number of working days in the month for which the distribution is made.
Taking into account the above aspects, although the Romanian Tax Code does not expressly regulate the granting/distribution of meal vouchers, its provisions must be supplemented with the rules established by Law no. 165/2018. Thus, it results that, from a corporate tax perspective, the expenses incurred with granting meal vouchers to employees have a limited deductibility.
More exactly, this means that the expenses with the vouchers granted are deductible for corporate income tax within the limit provided by Law no. 165/2018 – i.e., a ticket for each work day in which the employee is present at work, and within the maximum nominal value established by law.
Tax treatment applicable to employees
According to the provisions of the Romanian Tax Code (Art. 142, letter r) and the methodological norms for its application, meal vouchers granted to employees under paper or electronic format as per the applicable law are not subject to employee social contributions (CAS and CASS), nor to the social contribution due by the employer (CAM).
Therefore, no salary social contributions are due for this type of benefits in kind, either at the level of the employee or at the level of the employer.
On the other side, the value of the meal vouchers granted to employees is subject to salary income tax (10%), as per the provisions of Art. 76, par. (3), letter h) of the Tax Code. Therefore, at the level of each employee that receives the vouchers, the taxation of this type of benefit in kind is done only with income tax.
The applicable salary income tax rate is 10%, and the tax base subject to taxation must be the nominal value of a gift voucher multiplied by the number of vouchers granted during the month.
The taxable benefit in kind thus determined must be taxed as salary income (only with 10% tax) in the month in which it is received by the employee.
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