According to the provisions of articles 12 and 13 of Law 4172/2013 and the clarifying Ministerial Decision of the Ministry of Finance No.1219/06.10.2014, the following applies:
► Any benefits in kind granted to an employee or an employee's relative, are calculated in the employee's taxable income, in the benefits' market value, provided that the total value of the benefits in kind exceeds the amount of € 300,00 per fiscal year. The market value is considered to be the cost of the benefit which burdens the employer.
It is hereby pointed out that the benefits in kind which are granted to third persons who are not in any kind of employment relationship related to the company granting those benefits, are not considered as income.
The benefits in kind to be tax treated as income deriving from employment occupation include any benefit in kind which is granted to the employee, with the exception of the benefits exclusively aiming to the coverage of expenses or the compensation for losses / damages within the frame of their employment relationship.
As an example, such benefits in kind which are not considered to be income deriving from employment occupation, are the providing of special working clothes, milk, food / meals in the place of work, the granting of parking space, etc.
On the other hand, the benefits in kind granted to the employees and their relatives which exceed the amount of € 300,00 per fiscal year, thus increasing the taxable income of the employees, include (but are not limited to) the following:
- the value of goods, represented by the granted "gift coupons",
- the meals vouchers exceeding the amount of € 6,00 per working day,
- the use of company business cards for the coverage of personal expenses,
- the various payments carried out directly by the employers to third parties, such as those to educational & language institutes, schools, nursery schools, summer camps, etc.
Furthermore, in this case there is also the benefit arising for the employees, directors, general managers and administration members of educational / training organizations, as a result of the fact that their children visit those institutes free of charge or with reduced school fees, with the exception of the scholarships granted by the aforementioned educational institutes.
- The coverage of the participation costs in educational & study days, training programs or seminars, programs for further training or on-the-job business training, or the coverage of magazines' subscriptions and chambers' contributions, which are not related to the scope of the employment work.
- The payments directly processed, which are related to the coverage of the subscriptions & participation fees of those persons (to gym centers, clubs, etc.), as well as those referring to the coverage of their medical care expenses (for example check-up).
- The granting of company mobile phone connections usage to the employees, to the extent exceeding the cost of the use programs and provided that the usage program amount in excess is applied for their personal purposes and not for the employer's purposes of business activity.
It is possible to separate between the benefit which fulfills the business scope of the employer and the one fulfilling the personal purposes of the aforementioned persons, due to the fact that the bill issuance on part of the mobile phone company provider is supported by a movement analysis per number connection.
In any case, this separation can also be supported by a certificate issued by the employer, according to which the amount concerning the business use or the one referring to any other kind of company mobile phone connection use is confirmed on year basis. In case this separation is not possible or the employer does not out of any reason proceed with this separation and does not issue the relevant certificate, then the amount in excess of the program use costs is considered to be a benefit in kind.
In this benefit which increases the taxable income of the aforementioned persons, there are also the corresponding taxes and charges included (VAT, other charges).
► As benefit in kind there is also the market value defined for the granting of a company car to an employee for any period of time within the fiscal year, evaluated at a percentage of 30% of the depreciations costs, of the yearly car circulation tax, of the repair and maintenance costs, as well as of the purchase or lease financial cost, as those are concluded from the entries posted in the company's books. These amounts are tax treated as income deriving from employment occupation.
When the aforementioned cost is a zero amount, then this benefit is evaluated at a percentage of 30% of the average cost or depreciation during the last three (3) years. It should be pointed out that the further expenses referring to the aforementioned vehicles (fuel, toll, etc.) are not taken into consideration for the calculation of the granted company car's market value.
Summarizing, please note that in case of use of a company car for a period of less than one year (new hiring, separation of an employee due to pension or out of any other reason, dismissal, etc.) the value of the benefit is calculated according to the actual time period (in months) of its usage.
The use of a company's car by an employee for a period of over 15 calendar days will be considered as a one-month period.
The provisions of article 13, paragraph 2, do not include the following:
a) Cars granted by the companies to certain sales associates, technical personnel and other employees, whose the occupation requires the change of location on regular basis outside the registered office premises of the employer (tool cars) within the scope of the employer's business activity, regardless the fact whether those cars can be used by the beneficiary also beyond their working hours.
On the contrary, the according to the above defined market value of the cards granted to the employees due to their position are considered and concluded as benefit in kind (for example, to sales managers and supervisors, technical directors - project managers and other executive managers).
b) Test vehicles (test-drive) disposed by the car trade companies.
c) Personnel transport vehicles (for example mini-bus),
d) Cars used by companies (for example, hotels) for the transport of their guests or clients.
e) Cars disposed by the car repair and maintenance (service) companies as temporary replacement of the ones under repair.
f) Private cars used by the airline companies and the airport administration companies for the handling of aircrafts and the service of their passengers (airport runway vehicles) as well as for the transport of VIPS or personnel.
► As benefit in kind there is also the granting of a loan defined, upon written agreement with the employee. The benefit arising for the beneficiary of this loan granting is defined per fiscal year, it is calculated during the month, in which the benefit was given, and it is evaluated as the difference between on the one hand the interest calculated according to the average market interest rate and on the other hand the interest the employee possibly paid according to the relevant written agreement. In case there is no such a written agreement, then the total amount of the initial capital is considered as benefit in kind.
The salary advance payment of over three (3) months, that is, amounts exceeding the total of three months salaries, are considered to be a loan. For those amounts, the aforementioned provisions are applicable.
► As benefit in kind there is also the market value defined, from the granting of residence housing to an employee for any period of time within the fiscal year.
This benefit is evaluated at the rental amount directly paid by the employer to the lessor of the granted place of residence, while in the case that the house to be granted is in the ownership of the employer and no rental amount is paid according to a written agreement, the benefit in kind is evaluated at a percentage of 3% on the property's rateable value.
►Those provisions apply for income amounts obtained within the fiscal years which have commenced from 01.01.2014 and onwards.
Those benefits are subject to withholding tax from 01.01.2015 and onwards, more specifically, those will be calculated from the beginning of each year and then accordingly divided in 12 months if the benefit is granted the whole year, or in exactly so many months during which the relevant benefit is granted to the employee.
The ones responsible for the payroll calculation have to evaluate those benefits in kind which increase the taxable income of the aforementioned persons and include them also in the salary remuneration statements concerning the income deriving from employment occupation and pensions to be granted for the income amounts of the year 2014.
NOTE: This article does not cover advisory, but only informational purposes, and cannot serve, as a basis for further actions, on the part of the reader. Reception of specialized advice is required.
Our company does not hold any responsibility for any actions, taken by the readers, based on the present article.