Financial meal allowance

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A proposal by a group of parliament members for an amendment to the Labour Code which, among other things, amends and supplements the Income Tax Act, was submitted to the National Council of the Slovak Republic.

The aim is to eliminate inequality in the taxation of various forms of meal allowances, as well as to simplify the administration of employers in the provision of meal vouchers and financial meal allowances in advance for the relevant calendar month.

As of March 2021, employees can select between meal vouchers and a financial meal allowance to be provided by employers. If the employer provides meal allownaces within statutory limit stipulated by the Labour Code, in terms of taxes and social security and health insurance contributions, there is no difference in the above forms of meal allowances. However, if the employer provides financial meal allowances in the amount exceeding statutory limit from its own resources, such an “excessive” amount should be treated as a tax non-deductible expense for the employer and should represent the taxable income for the employee. On the contrary, in the case of meal vouchers, this amount is a recognised as the tax expense and is not treated as taxable income for the employee.

This amendment proposes to increase the employer’s meal allowance for employees up to 100% of the amount of meal allowance provided for a business trip of 5 to 12 hours, without the employer’s allowance being non-deductible and taxable for the employee. At present, the maximum amount of this allowance is 55%. It is also proposed that the employer should provide the meal vouchers or the financial meal allowance retrospectively for the given month, but no later than by the end of the following calendar month, along with the deadline for the payment of wages.

For the sake of objectivity of this article, we also consider it important to note that the Ministry of Labour, Social Affairs and Family of the Slovak Republic recommends that the Government of the Slovak Republic express its disagreement with this proposal.

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