Exemption Application Regarding Meal Fees
The General Communique on Income Tax No. 322, published in the Official Gazette No. 32059 (2nd Supplementary) on 30.12.2022, regulates the procedures and principles for the income tax exemption on meal payments made by employers to employees, as stipulated in Law No. 7420, enacted on 03.11.2022.
Below are the explanations regarding the regulations in the Communique:
1) Exemption on Benefits Provided Through Meal Provision Without Cash Payment
Employers continue to be exempt from income tax for providing meals to employees at the workplace or its premises, or by purchasing ready-made meals from taxpayers who provide such services at the workplace or its premises, without any limit on the amount of the benefit.
If no meal services are provided at the workplace or its premises, and the meal service is provided by loading meal cards or purchasing meal vouchers, the exemption will apply for a daily meal allowance of up to 51 Turkish Liras per employee for the days worked (as determined by the 323 Series No. Communique, the exemption limit for the daily meal allowance has been set to 110 TL).
The procedures and principles for applying these exemptions are regulated in the 186 Series No. Income Tax General Communique.
2) Exemption on Benefits Provided Through Cash Meal Payments
With Law No. 7420, if no meals are provided at the workplace or its premises, the cash payment made by the employer to the employee for meals is also included in the scope of the exemption.
The conditions for the exemption of cash meal payments, as determined by the 322 Series No. Communique, are as follows:
- No meal service is provided at the workplace or its premises by the employer,
- The daily meal allowance does not exceed 51 Turkish Liras (as determined by the 323 Series No. Communique, the exemption limit for the daily meal allowance is 110 TL),
- The payment is for the days actually worked.
The meal allowance payments made in cash will be conducted according to the payment procedures established in the Regulation on Payment of Wages, Bonuses, and Other Remunerations through Banks.
Below are the related examples:
Example 1: Employer (A) starts making meal payments to employees’ bank accounts from 1/12/2022. Employer (A) pays 51 TL per employee as a daily meal allowance.
Employer (A) pays employee (B) a meal allowance of (51 TL x 22 days =) 1,122 TL for working 22 days in December.
Since the meal payments made for the actual days worked and not exceeding 51 TL per day are exempt from income tax, the entire 1,122 TL meal allowance paid by employer (A) to employee (B) is exempt from income tax.
Regardless of whether the entire meal allowance is exempt, it must be shown on the payroll. The exempt meal allowance will not be included in the taxable income. Additionally, the exempt portion is also exempt from stamp tax.
Example 2: Employer (C) starts making meal payments to employees’ bank accounts from 1/12/2022. Employer (C) pays 100 TL per employee per day, taking into account the number of days worked.
Employer (C) pays employee (Ç) a total of (100 TL x 26 days =) 2,600 TL for working 26 days in December.
In this case, the meal payments for the actual days worked and not exceeding 51 TL per day are exempt from income tax. Therefore, the portion of the meal allowance (51 TL x 26 days =) 1,326 TL paid by employer (C) to employee (Ç) is exempt, and the remaining (2,600 TL – 1,326 TL =) 1,274 TL will be subject to income tax.
You can access the related Communique here.
Best regards,
BİLGENER
