en
Is income tax deducted from meal allowances paid to employees?
Is income tax deducted from meal allowances paid to employees?
In the company I work for, the cost of meals (5 manats) is directly paid to the employees. The amounts paid are considered deductible expenses according to Article 109.3 of the Tax Code and Clause 2.1.3 of the Cabinet of Ministers' "Regulations on the Deduction of Representation Costs, Housing and Meal Expenses for Employees, as well as Costs Related to Medical-Preventive Meals, Milk, and Other Products and Items Equivalent to Milk for Employees Working in Harmful, Hazardous, and Underground Conditions for Tax Purposes." So, should income tax be withheld on the 5 manat meal allowance paid to employees?
The State Tax Service under the Ministry of Economy has stated that, according to Article 98.1 of the Tax Code, income received by an individual from paid employment, including wages, any payment or benefit from such employment, as well as income from previous or future paid employment, is considered taxable income. Under Article 98.2.3 of the Tax Code, except for the expenses mentioned in Article 119.2, if the expenses of an employee are reimbursed, the amount paid is considered income from paid work.
The Service also noted that Article 119.2 of the Tax Code refers to representative expenses, housing and meal expenses for employees, and also costs related to medical-preventive meals, milk, and other products and items equivalent to milk for employees working in harmful, hazardous, and underground conditions.
According to the aforementioned decision of the Cabinet of Ministers and Clause 2.1 of the approved Regulations, meal expenses for employees, as well as expenses for medical-preventive meals, milk, and other equivalent products for employees working in hazardous, heavy, or underground conditions, are considered deductible expenses for tax purposes within the prescribed norms.
According to the regulations, when meal expenses are reimbursed directly to an employee, the daily norm for deductions is 5 (five) manats per employee. If the meal service is provided by the employer or another taxpayer engaged in public catering, the amount is also 5 (five) manats. Additionally, when the meal allowance is paid directly to the employee by non-cash methods, it is considered a deductible expense.
Meal expenses paid within the prescribed norms are not considered taxable income for the employee.
In the company I work for, the cost of meals (5 manats) is directly paid to the employees. The amounts paid are considered deductible expenses according to Article 109.3 of the Tax Code and Clause 2.1.3 of the Cabinet of Ministers' "Regulations on the Deduction of Representation Costs, Housing and Meal Expenses for Employees, as well as Costs Related to Medical-Preventive Meals, Milk, and Other Products and Items Equivalent to Milk for Employees Working in Harmful, Hazardous, and Underground Conditions for Tax Purposes." So, should income tax be withheld on the 5 manat meal allowance paid to employees?
The State Tax Service under the Ministry of Economy has stated that, according to Article 98.1 of the Tax Code, income received by an individual from paid employment, including wages, any payment or benefit from such employment, as well as income from previous or future paid employment, is considered taxable income. Under Article 98.2.3 of the Tax Code, except for the expenses mentioned in Article 119.2, if the expenses of an employee are reimbursed, the amount paid is considered income from paid work.
The Service also noted that Article 119.2 of the Tax Code refers to representative expenses, housing and meal expenses for employees, and also costs related to medical-preventive meals, milk, and other products and items equivalent to milk for employees working in harmful, hazardous, and underground conditions.
According to the aforementioned decision of the Cabinet of Ministers and Clause 2.1 of the approved Regulations, meal expenses for employees, as well as expenses for medical-preventive meals, milk, and other equivalent products for employees working in hazardous, heavy, or underground conditions, are considered deductible expenses for tax purposes within the prescribed norms.
According to the regulations, when meal expenses are reimbursed directly to an employee, the daily norm for deductions is 5 (five) manats per employee. If the meal service is provided by the employer or another taxpayer engaged in public catering, the amount is also 5 (five) manats. Additionally, when the meal allowance is paid directly to the employee by non-cash methods, it is considered a deductible expense.
Meal expenses paid within the prescribed norms are not considered taxable income for the employee.