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Are insurance premiums calculated based on meal expenses deducted from income?
Are insurance premiums calculated based on meal expenses deducted from income?
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An employee has been provided with additional funds for meals via a card by the company. According to Article 98.2.3 of the Tax Code, this is considered the employee's income. However, Article 109.9 of the Tax Code states that this income is not considered taxable income. According to Article 15 of the Social Insurance Law, insurance should be calculated based on meal expenses. My question is: Are the social insurance premiums calculated based on meal expenses and paid by the insurer deductible from income?
The State Tax Service under the Ministry of Economy has informed us that, based on the amendments to the Tax Code, starting from January 1, 2024, expenses related to representation, housing, and meals for employees, as well as expenses for medical-prophylactic meals, milk, and other similar products and items for employees working under harmful, heavy conditions, and in underground work, are considered deductible expenses from income within the norm.
According to Article 119.2 of the Tax Code, the norms and procedures for deducting expenses related to representation, housing, and meals for employees, as well as medical-prophylactic meals, milk, and other similar products and items for employees working under harmful, heavy conditions, and in underground work, from income are determined by the Cabinet of Ministers of the Republic of Azerbaijan.
Additionally, please note that when compensation for meal expenses is paid directly to the employee, the amount of meal expenses reimbursed to the employee is considered part of the employee’s wage income and is subject to income tax.
According to Article 109.3 of the Tax Code, with the exception of the expenses provided for in Article 119.2 of this Code, deductions for social and entertainment expenses of employees and their family members are not allowed from income.
According to Article 116 of the Tax Code, except for insurance premiums for property insurance in favor of employees and life insurance contracts with foreign insurers, premiums paid by the insured and the reinsurer are deductible from income.
An employee has been provided with additional funds for meals via a card by the company. According to Article 98.2.3 of the Tax Code, this is considered the employee's income. However, Article 109.9 of the Tax Code states that this income is not considered taxable income. According to Article 15 of the Social Insurance Law, insurance should be calculated based on meal expenses. My question is: Are the social insurance premiums calculated based on meal expenses and paid by the insurer deductible from income?
The State Tax Service under the Ministry of Economy has informed us that, based on the amendments to the Tax Code, starting from January 1, 2024, expenses related to representation, housing, and meals for employees, as well as expenses for medical-prophylactic meals, milk, and other similar products and items for employees working under harmful, heavy conditions, and in underground work, are considered deductible expenses from income within the norm.
According to Article 119.2 of the Tax Code, the norms and procedures for deducting expenses related to representation, housing, and meals for employees, as well as medical-prophylactic meals, milk, and other similar products and items for employees working under harmful, heavy conditions, and in underground work, from income are determined by the Cabinet of Ministers of the Republic of Azerbaijan.
Additionally, please note that when compensation for meal expenses is paid directly to the employee, the amount of meal expenses reimbursed to the employee is considered part of the employee’s wage income and is subject to income tax.
According to Article 109.3 of the Tax Code, with the exception of the expenses provided for in Article 119.2 of this Code, deductions for social and entertainment expenses of employees and their family members are not allowed from income.
According to Article 116 of the Tax Code, except for insurance premiums for property insurance in favor of employees and life insurance contracts with foreign insurers, premiums paid by the insured and the reinsurer are deductible from income.