Meal vouchers: what’s new under the new 2020 rules?
As of 1 January 2020 new rules on the use of meal vouchers will apply in Italy. Art. 1 of paragraph 677 of the Budget Law approved in Parliament on 23 December 2019 provides for two changes compared to the previous rules.
Meal vouchers regulation 2020: change of meal voucher tax exemption limits
The first amend is the tax exemption limits:
- Paper vouchers: Down to € 4.00 from € 5.29
- Electronic vouchers: Rises to € 8.00 from € 7.00
Meal vouchers regulation 2020: non-expensable of VAT on paper vouchers
The second amend introduced by the 2020 legislation: VAT on the value of paper meal vouchers may not be deducted from other VAT.
From January 2020 companies providing employees with €5 paper meal vouchers will have to pay social security on the amount exceeding the exemption (€1) and will not be able to deduct the VAT applied on the total value of the paper meal voucher from other VAT. Moreover, the employee’s income will be increased by the amount of the meal voucher exceeding the exemption and on which income taxes are calculated.
Meal vouchers regulation 2020: curbing tax evasion and elusion
The 2020 meal vouchers regulation aims to encourage the use of electronic payments to curb the misuse/illegal use of meal vouchers to reduce both tax evasion and usage by individuals other than the voucher holder. The legislation aims to reduce tax evasion/elusion but allows the use of both paper and electronic formats. Therefore, a double administrative burden remains, forcing companies to evaluate the possible convenience of using paper vs. electronic vouchers based on a number of factors – not just rational. It also introduces operational uncertainties for merchants who have to assess whether to accept electronic meal vouchers from one/several/all issuers with the consequent provision of dedicated POS terminals.
Mandatory electronic meal vouchers: a possible alternative?
Regulation to make electronic meal vouchers the only alternative – at least 12 months in advance – would have been clearer for both businesses and merchants and reduced administrative costs. In addition, the tax authorities would have achieved their objectives more quickly and efficiently.
This is what happened in Belgium, where since October 2015 only electronic vouchers can be issued.
The CleverAdvice Team