25.01.2023/23
Exemption Application Regarding Meal Costs
With the publication of the General Communique on Income Tax No. 322 in the Official Gazette No. 32059 (2nd Repetition) dated 30.12.2022, the procedures and principles related to the income tax exemption for meal payments made by employers to employees, as regulated under Law No. 7420 dated 03.11.2022, have been set out.
Explanations regarding the regulations in the Communique are provided below:
1) Exemption on Benefits Provided Without Cash Payment for Meals
Employers continue to be exempt from income tax for providing meals to employees either at the workplace or its premises, or by purchasing meals from taxpayers who provide ready-made meals at the workplace or its premises, without any limitation on the amount.
If no meal service is provided by employers at the workplace or its premises, and meal cards are loaded or meal vouchers are purchased to provide meal services, the exemption will continue to apply for an amount not exceeding 51 Turkish liras per day for each employee, based on the number of days worked (with the 323rd Series No. Communique, the exemption amount for a daily meal cost related to the days worked has been set to 110 TL).
The procedures and principles for applying these exemptions are regulated in the General Income Tax Communique No. 186.
2) Exemption on Benefits Provided in Cash for Meal Costs
With Law No. 7420, when meals are not provided at the workplace or its premises, the meal payments made in cash to employees are also included in the exemption.
The conditions required for the cash payment to be exempt from income tax, as determined by the 322nd Series No. Communique, are as follows:
- Meals are not provided at the workplace or its premises by the employer,
- The daily meal cost does not exceed 51 Turkish liras (with the 323rd Series No. Communique, the exemption amount for a daily meal cost related to the days worked has been set to 110 TL).
- The payment is related to the actual days worked.
Cash meal payments will be made according to the payment methods specified in the Regulation on the Payment of Wages, Bonuses, and Other Types of Entitlements through Banks.
Examples are as follows:
Example 1: Employer (A) starts making meal payments to the employees’ bank accounts on 1/12/2022. Employer (A) pays each employee 51 TL as a daily meal allowance.
Employer (A) has paid employee (B) 1,122 TL for the 22 days worked in December (51 TL x 22 days = 1,122 TL).
Therefore, as the daily meal payments for the actual days worked, which do not exceed 51 TL, are exempt from income tax, the full meal payment of 1,122 TL made by employer (A) to employee (B) will be exempt from income tax.
Regardless of whether the entire meal allowance given in cash by the employer to the employee is within the exemption scope, it must be shown on the payroll. The portion of the meal allowance within the exemption scope will not be included in the tax base. Additionally, the portion within the exemption scope is also exempt from stamp duty.
Example 2: Employer (C) starts making meal payments to the employees’ bank accounts on 1/12/2022. Employer (C) pays each employee 100 TL as a daily meal allowance, considering the number of days worked.
Employer (C) has paid employee (Ç) 2,600 TL for the 26 days worked in December (100 TL x 26 days = 2,600 TL).
Therefore, as the daily meal payments for the actual days worked, which do not exceed 51 TL, are exempt from income tax, 1,326 TL (51 TL x 26 days = 1,326 TL) of the meal payment made by employer (C) to employee (Ç) will be exempt from income tax, and the remaining 1,274 TL (2,600 TL – 1,326 TL = 1,274 TL) will be taxable.
You can access the related Communique here.
Sincerely,
BİLGENER
