Free catering for employees in VAT law

If the VwGH in the scope of application of the German Value Added Tax Act 1972 (UStG 1972) assessed the discounted or free provision of meals to employees as taxable, then starting with the UStG 1994, referring to the European Court of Justice of 16 October 1997, a change in direction has taken place. Sales tax exemption result

:: The VwGH 4 June 2003, 98/13/0178 refuses Accordingly, the presence of a Consumption of own resources, if the employer's contribution is primarily in business interest In the specific case, this was justified by the fact that canteen catering in the business sector serves to ensure that employees are present during the lunch break and can be reached by phone for customers or suppliers, thus maintaining the ongoing business operations.

:: Tax assessment without operational interest

According to RZ 672 UStR 2000, the taxable base for VAT purposes is 2/3 of the salary tax base. This applies both to canteen meals and to the provision of catering by third parties. According to the 2001 VAT Protocol, the amount of the full free station is divided by 30 at € 196.20 per month. For each day, 3/10 of the total is allocated to a lunch of € 1.98. The 10%% VAT is then calculated at € 0.18.

Exception: According to RZ 71 UStR 2000, catering businesses are exempt from VAT both for accommodation and catering services. This means that business interest is not a prerequisite.
Gift and gift vouchers within the meaning of §3 (1) Zi 17 EStG are not subject to VAT and are therefore exempt from VAT when passed on to the service recipient by the service provider. Furthermore, reference is made to TZ 61 UStR 2002 regarding VAT exemption regarding the minor threshold (e.g. drinks at the workplace).

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