One of the side benefits provided to employees is food allowance. While meals during workday can be offered directly to the employee as a cafeteria service, it can also be provided with different payment methods such as cash or meal cards/coupons/checks. The change in the VAT rate of the meal allowance is a factor that not only reduces the meal amounts but also affects the payroll processes of wage earners.
VAT Discount on Meal
Last summer, the VAT rate of food expenditures was reduced. The VAT rate of 8% was reduced to 1% with the President’s decree published in the Official Gazette on 31 July 2020. It was announced that the application would continue until the end of the year. With the new regulation, the VAT on food allowance will remain at 1% until July 31, 2021.
Accordingly, the exemption for the amounts loaded on the meal cards will be applied until the end of July, taking into account the 1% VAT rate.
The daily exemption for meal allowance paid via meal cards/checks/coupons valid for 2021 was determined as 25 TL on a working day basis. The exemption amount for which we apply the VAT rate as 1% is 25.25 TL. If there is no extension decision as of August, if the VAT is applied as 8%, this amount will be updated as 27 TL.