The value added tax (VAT) treatment of employer-provided meal vouchers has been clarified in reports jointly issued by the Czech tax administration and a chamber of tax advisors.
The position of the tax administration in the reports is that meal vouchers are vouchers in the meaning of the VAT law. The VAT treatment of meal vouchers will depend on whether they are single-purpose or multi-purpose vouchers. In most cases, they will be multi-purpose vouchers (i.e., vouchers for which the tax rate or the place of supply is not known at the time of their issue). Yet, it is also possible that the contractual conditions of some meal vouchers will make them single-purpose vouchers. The assumption is that meal vouchers are transferred from their issuers to employers, and subsequently to employees, for consideration.
Because the issuance and redemption of multi-purpose meal vouchers is outside the scope of VAT, there is a question whether the meal vouchers’ issuer will have the full entitlement to a VAT deduction on these supplies. The position of the tax administration is that the issuer is entitled to a VAT deduction in the full amount, on all direct and indirect costs connected with the voucher, as well as the distribution or redemption of multi-purpose meal vouchers.
Employers that provide meal vouchers to their employees need to consider their VAT treatment.
Read a June 2019 report prepared by the KPMG member firm in the Czech Republic
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