Employee discounts: When are these taxable?

  • Preferably cut into pieces
  • Popular benefits
  • Then at employee discounts expected
  • The rules also apply to subsidiaries?
  • The Supreme Court is the taxpayers not positively set

But benefits sometimes lead to surprises. Namely, when the employee has to pay tax on the non-cash benefits received. This is how it happened in Cologne, where a car manufacturer wanted to involve the employees of its subsidiary in the annual car program. In this case, the tax legislation speaks of a financial benefit that is taxable.

Benefits and taxes are not always linked, as the Federal Fiscal Court (BFH) has now ruled.

It is best to cut into pieces

Salary benefits are sometimes more appealing than an increase. There is more net of gross. The company has the option of additional services in Amount of 600 euros per. calendar year must be given to each employee untaxed, ie 50 euros per month. But as a one-off benefit, the 600 EUR are taxable.

Example: The company gives you employees a monthly petrol coupon of 50 EUR. This remains tax-free due to the de minimis regulation.

Modification: If the employee receives a one-time petrol voucher of 600 euros, then this is a financial benefit, which exceeds 50 euros and is therefore subject to income tax.

Popular benefits

These benefits are particularly popular:

  • Breakfast vouchers: Companies that do not run their own canteen can provide their employees with lunch vouchers that can be exchanged for restaurants in the area.
  • Company bikes: Various companies now offer leasing bikes (sometimes also electric bikes). The employer pays rental expenses and insurance fees for the company bike.
  • Sports and leisure activities: A fully or partially employer-sponsored fitness membership is a pleasure for many employees.
  • Sabbatical year: Longer sabbatical years only make sense if the return to work is well-organized in terms of content and staff.
  • Holidays for voluntary work: Many employees are volunteers. If you get extra days off from your employer for this, it shows appreciation.
  • Childcare company: This is ideal if the company can offer its employees internal support services. A good alternative is company care close to the company.
  • Additional training options: Individual training courses are high on the list of the most popular employee benefits.
  • Annual car program: Car manufacturers entice with discounted annual cars.

This is how employee discounts are calculated

For tax purposes, employee discounts have limits that you and your employer must adhere to.

Example: Pharmacist Claudia Mustermann gives her employee Michaela Musterfrau a 50 percent discount on the sale price of over-the-counter products. The employee buys goods for a total of 1,750 euros (normal price) during a year. The monetary benefit is below the rebate surcharge and remains free of income tax and social security contributions.

And this is how it is calculated:

  • Value of employee acquisition (gross) 1,750 euros
  • Minor valuation discount four percent 70 euros
  • Relevant item value 1,680 euros
  • Minor employee purchase price paid 875 euros
  • non-cash benefit: reduction of 805 euros

If the annual allowance is exceeded, tax must be paid on the excess amount (only on the excess amount). Additional services, as explained above, are independent of this.

Do the rules also apply to subsidiaries?

BFH in Munich now had to decide on a special variant of employee discounts. It was about a car manufacturer in Cologne. The employees of a subsidiary received the same discounts when buying a car (annual car program) as the company’s own employees. But it was controversial.

The automaker had a 50 percent stake in the supplier and included its employees in its employee discount program. The plaintiff bought a new vehicle in 2015 and received a price advantage as part of the terms of employment, which was around 1,700 euros above the usual dealer discount. In addition, the transfer costs of 700 euros were waived.

However, the tax office blocked this action and treated these benefits as taxable salary.

The Treasury Court is not sympathetic to the taxpayers

However, the Financial Court (FG) Cologne corrected the tax assessment and accepted the bonus program for the employees of the subsidiary (FG Cologne, judgment of 11 October 2018, Az .: 7 K 2053/17). In the court’s view, neither the car rebate nor the remission of the transfer costs was pay.

The crucial thing is that the car manufacturer has given the discounts in its own commercial interest in selling and not for the work the employee has done. The manufacturer opens up an easily accessible customer base among the supplier’s employees.

However, the BFH (judgment of 16 February 2022, Az .: VI R 53/18) revoked the court and reversed the decision. He sees taxable income in the employee discount. The close ties that the two companies have are not enough to provide staff discounts.

My conclusion: This is not a taxpayer – friendly decision. The opportunity to significantly expand the discount sale failed due to the BFH ruling. But the idea of ​​additional services remains attractive.

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