The supply of tickets restaurant to companies’ employees has become an increasingly common compensation method, as this formula offers tax benefits for both companies and employees.
Whilst companies can deduct from their Corporation taxable result the whole amount allocated to the tickets as salary expenses, employees are exempt from their Personal income tax.
Besides, due to the success of this compensation method and in order to adequate it to market prices, the Spanish Government increased the amount exempt last year, from 9 to 11 euro per day. With this increase, employees can save up taxation on 2 additional euro per day, 5 days a week during a maximum period of 11 months.
✔ To benefit from the tax exemption, the following requirements must be met:
- The maximum amount per day is of 11 euro. The excess qualifies as a taxable fringe benefit.
- Tickets must be numbered, nominative and non – transferable.
- The issuer company must be included and, if they are issued on paper, their nominal value as well.
- The amount of 11 euro not used in a concrete day cannot be accumulated to another day.
- They are not reimbursable.
- They can only be used in hotel / restaurant establishments.
- The employer must keep a list of the tickets supplied, including the number of the document, their nominal value as well as the day of delivery. The Spanish Directorate of Taxes is of the opinion that this latter day is the one in which the employee must use the ticket.
Besides, it is necessary that the service takes place during days in which the employee does not derive per diem exempt maintenance expenses and that they are used in labor days for the employee.
✔ As a general rule, the employer is responsible for meeting the mentioned requirements. Their non – compliance derives in a fringe benefit for the employee which subject to withholding tax.
Notwithstanding this, the Spanish General Directorate of Taxes has determined that, the responsibility for not meeting the prohibition of accumulating the amounts cannot rely on the employer, as it is a question that depends on the employee’s determination. In such a case, it will be the employee’s responsibility to declare the accumulated amounts in his annual Personal income tax return.
✔ In summary and providing that the mentioned legal requirements are met, you have to take note that eating out can help you saving up taxes.