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In which cases will the employee's meal expenses not be allowed to be deducted from income?
In which cases will the employee's meal expenses not be allowed to be deducted from income?
According to paragraph 2.2 of the rules approved by the Cabinet of Ministers’ Decision No. 492, the meal expenses incurred by the taxpayer within the limits defined by subparagraph 2.1.3 of these rules can be deducted from income under the following conditions:
- When the cost of meals is paid directly to the employee without cash;
Example. The employer pays the employee 100 manats for meals, 5 manats per day for 20 working days. Of this amount, 70 manats are paid without cash to the employee’s salary card, and 30 manats are paid in cash. In this case, the taxpayer can only deduct the 70 manats paid without cash from income, not the full 100 manats.
- When the meal is prepared by the employer, and the purchase of the products used for preparing the meal is documented according to the rules set forth in the Tax Code;
Example. The taxpayer decides to prepare meals for the employees themselves. However, the agricultural products purchased from citizens for meal preparation were not formalized with purchase documents. In this case, the taxpayer will not be allowed to deduct the meal expenses from income.
- When catering services are provided by another taxpayer engaged in public catering activities based on an electronic invoice.
Example. The employer enters into a contract with a catering service provider to supply meals for employees and makes a payment, but no electronic invoice is provided. Only the payment receipt from the cash register is available. In this case, the taxpayer will not be able to deduct this expense from income.
According to paragraph 2.2 of the rules approved by the Cabinet of Ministers’ Decision No. 492, the meal expenses incurred by the taxpayer within the limits defined by subparagraph 2.1.3 of these rules can be deducted from income under the following conditions:
- When the cost of meals is paid directly to the employee without cash;
Example. The employer pays the employee 100 manats for meals, 5 manats per day for 20 working days. Of this amount, 70 manats are paid without cash to the employee’s salary card, and 30 manats are paid in cash. In this case, the taxpayer can only deduct the 70 manats paid without cash from income, not the full 100 manats.
- When the meal is prepared by the employer, and the purchase of the products used for preparing the meal is documented according to the rules set forth in the Tax Code;
Example. The taxpayer decides to prepare meals for the employees themselves. However, the agricultural products purchased from citizens for meal preparation were not formalized with purchase documents. In this case, the taxpayer will not be allowed to deduct the meal expenses from income.
- When catering services are provided by another taxpayer engaged in public catering activities based on an electronic invoice.
Example. The employer enters into a contract with a catering service provider to supply meals for employees and makes a payment, but no electronic invoice is provided. Only the payment receipt from the cash register is available. In this case, the taxpayer will not be able to deduct this expense from income.