Situation:
A company ABC SRL, which is active in the field of wholesale of wooden articles, gives its employees meal vouchers worth 30 lei and a hot meal every day. All hot meal expenses are recorded in account 6588 non-deductible expenses.
What is the tax and accounting treatment of hot meals granted to company employees?
Solution:
According to article 76, paragraph (4^1), letter b) of Law no. 227/2015 on the Fiscal Code, the following monthly accumulated income does not represent taxable income in the sense of income tax, within the monthly limit of 33% of the basic salary corresponding to the job occupied or of the monthly salary/monthly salary granted/ granted according to the law:
(… ) b) the value of the food provided by the employer for its employees, natural persons who earn income from wages or equivalent to wages, in situations other than that provided for in paragraph (4), point c (food provided by employers to employees, where, according to the legislation, it is forbidden to bring food into the establishment), as provided for in the employment contract or in the internal regulations, within the limit of the maximum amount, according to the law, of one meal voucher/person/day, provided for at the date of granting, in accordance with the legislation in force.
The number of days in the month in which the natural person works as a teleworker or home worker or is on rest/medical/leave of absence is not taken into account when establishing the monthly non-taxable ceiling. Food means food prepared in own establishments or purchased from specialised establishments. The provisions do not apply to employees who receive meal vouchers in accordance with the legislation in force.
Thus, in the case of the company mentioned above, the entire amount paid by the employer for the meal served is a taxable benefit with all payroll taxes, since the employee also receives meal vouchers, granted according to the law for the days worked.
From a corporate income tax point of view, according to article 25, paragraph (2) of Law no. 227/2015 on the Tax Code, expenses for salaries and those assimilated to salaries as defined according to Title IV are deductible expenses for the determination of the tax result, with the exception of those covered by paragraphs (3) and (4).
According to paragraph 14 of the Methodological Norms issued for the application of the Tax Code, In application of the provisions of Article 25, paragraph (2) of the Tax Code, expenses with salaries and those assimilated to salaries, as defined according to Title IV Income Tax of the Tax Code, are deductible expenses for the determination of the tax result, regardless of the tax regime applicable to them at the level of the individual.
Thus, expenses with salaries and those assimilated to salaries are considered fully deductible expenses for determining the tax result, regardless of the tax regime applicable to them at the level of the individual, except for the expenses of a salary nature listed in Article 25, paragraph (3) and (4) of the Tax Code, but these exceptions do not include the benefit assimilated to the salary in the form of the value of the hot meal granted, the related expenses being fully deductible.
Thus, for the company ABC SRL, the value of the hot meal granted is a fully deductible expense when calculating the corporate income tax.
The accounting records for ABC SRL are:
– the registration of the invoice for the hot meal given to employees:
6588 “Other operating expenses” (deductible expenses) = 401 “Suppliers”
4426 “Deductible VAT” = 401 “Suppliers”
– registration of the benefit in kind:
4282 “Other staff-related receivables” = 7588 “Other operating income”
– the registration of expenditure on hot meals assimilated to the benefit in kind:
6421 “Expenditure on benefits in kind granted to employees” = 421 “Staff – salaries due”
– registration of tax obligations due by the employee:
421 “Personnel – wages and salaries due” = 4315 “Social insurance contribution”
421 “Staff – wages and salaries payable” = 4316 “Health insurance contribution”
421 “Personnel – wages and salaries payable” = 444 “Payroll tax”
646 “Expenditure on insurance contribution for work” = 436 “Insurance contribution for work”
– registration of the the settlement of the benefit granted:
421 “Staff – salaries due” = 4282 “Other staff-related receivables”
Legal basis:
– Tax Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), as amended and supplemented;
– Tax Procedure Code (approved by Law no. 207/2015, published in MO no. 547 of 23.07.2015), as amended and supplemented;
– Methodological Norms for the application of the Tax Code (approved by HG no.1/2016).