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| The status of the food prices paid cash to the personnel in terms of Income Tax.
Question: May the food prices paid in cash to the employees be assessed within the scope of the price exemption stated in the article 23/8 of the Income Tax Law?
Answer: “The advantages provided to the employees by the employers by offering lunch” in the clause 8 of the article 23 of the Income Tax Law with no. 193 are exempt from tax. The employer may provide lunch inside or outside the work place.
Daily lunch payment to the employees by the employers for the days when lunch is not offered at the work place or at its premises should not exceed 10.00 YTL excluding VAT (to apply in the year 2009 with the general communiqué of the income tax with serial no. 270) and this payment should be made to the taxpayers who provide the lunch service. In case that the payment exceeds this amount, the cash payments to the employees with the exceeding part as lunch payment and the advantages provided with this purpose shall be subject to tax as payment.
Related to the issue, the section 2/a of the income tax general communiqué with serial no. 186 published in the Official Gazette dated 26/07/1995 with no. 22355; it says “…in the application of the mentioned exception provision;
· Employers shall make the lunch payment to the institution providing the lunch giving service directly or the institution mediating with the institution providing the lunch service (not to the employee),
· Daily amount of the lunch payment for the days of active work shall not exceed 100 TL (10.00 TL to be effective in the year 2009 with the income tax general communiqué with serial no. 270) or the exceeding amount shall be subject to corporate tax.
According to this provision and statements, in case of making lunch payment to the personnel in cash, all of these payments shall be considered wage and shall be subject to tax according to the article 94/1. of income tax law.
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