Food without VAT

04.10.2010

VAT is not charged on amounts given to employees instead of food.
Responding to the appeal of the taxpayer on the application of value added tax in respect of amounts of compensation expenses for food, accrued employee organization in accordance with the employment contract, the Finance Ministry in a letter dated 02.09.2010 № 03-07-11/376 was pointed out that there are two ways to organize meals for employees - to give employees coupons to buy food or pay the money.
The second option for employers is preferred because the amount of compensation expenses for food, accrued employee organization in accordance with the employment contract, are not subject to taxation the value added tax.