The German Federal Court of Finance (BFH) decided in its decision of 20.08.1997 (BStBl. II S. 667) that employers and employees can replace cash wages with a non-cash benefit by mutual agreement without further ado.
The legal basis for the meal subsidies by means of Circula is the BMF letter dated 18.01.2019. Accordingly, meal allowances of working days from 2023 up to 6.90 € per day with the official non-cash remuneration value of 3.80€ being taxable as a lump sum. This results in a division of the meal subsidy into a tax-free and a taxable part:
Food allowances that do not exceed the limit (of 3.80€) can be valued as a meal taken by the respective employee at the official non-cash benefit value and taxed at a flat rate of 25%. In the case of lump-sum taxation, the non-cash benefit is exempt from social security contributions under § 1 (1) SvEV. The amount exceeding this of (maximum) EUR 3.10 represents a tax-free subsidy from the employer. Additional payments made by the employee for the meal are to be credited against the lump-sum taxable value of the non-cash benefit.
Since 2016, in addition to physical meal vouchers, digital meal subsidies are also possible (BStBl 2016 I S. 238).
How the calculation works:
The maximum benefit per day is €6.90 (2023) and is divided into two parts. A base of € 3.80, which represents the "non-cash benefit value" of midday meals; taxation can take place according to the tariff by attribution to the individual employee or as a lump sum with the flat tax rate of 25% plus SolZ and church tax. The lump-sum wage taxation triggers exemption from social security contributions. In addition, the employer can provide up to € 3.10 tax-free.
If the employee submits less than the maximum (6.90€), the tax-free amount gets reduced by the amount of the difference. If the user submits less than 3.80€ in a day, the non-cash benefit value of 3.80€ is still taxable.
If the employee pays more than 6.90€ for his lunch, the amount subject to tax (fixed tax rate) gets reduced by the amount of the difference. A receipt of 10.70€ or higher will result in a tax-free reimbursement of 6.90€.
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