Back to non-wage benefits in companies. Remember about limits
Companies that provide employees with prepaid cards as non-wage benefits should remember that it is possible to benefit from PIT exemption here, but within the statutory limit.
The stabilisation of the pandemic situation has caused many companies to return to the stationary mode of working, bringing back non-wage benefits such as prepaid cards. And once again, questions have resurfaced about whether the provision of such a card to an employee, funded from the Company Social Benefits Fund, will be exempt from PIT.
Adam Allen, tax adviser, partner in Thedy & Parters, reminds that in case of transferring gift cards to employees, financed from the Company Social Benefits Fund, income arises for the employee. However, this income will be exempt from personal income tax up to the amount of the limit applicable in the tax year, pursuant to Article 21 (1) (67) and Article 52l (3) of the Personal Income Tax Act.
– It is worth remembering that the limit of the aforementioned exemption in the period from 2020 to the end of the tax year following the year in which the state of the epidemic declared due to COVID-19 was cancelled is PLN 2,000, adds Adam Allen.
The exemption limit set by the legislature is one and applies to all benefits paid in a given year from social and trade union funds, regardless of how many establishments the employee is employed in and from how many eligible entities (employers and trade unions) he receives benefits from these funds.
– This means that if, in total, an employee receives more than the quota limit set by the legislator from all of the workplaces, the surplus over that amount is subject to taxation – suggests the expert from Thedy & Partners.
Consequently, if the total value of the benefits in kind and in cash received by the employee does not exceed the value set out in the regulations (PLN 2,000) in the tax year, the company providing the benefit will not have any payer’s obligations arising in this respect, including the obligation to add the value of the benefit to the taxable income of the given employee and to calculate, collect and remit an advance personal income tax payment.
A similar position can be found in individual interpretation no. 0115-KDIT2.4011.96.2022.1.RS.