Digital meal vouchers

Definition

The digital meal voucher is a new form of meal subsidy that follows the traditional paper meal voucher. Unlike the traditional meal voucher, which is tied to selected providers and can also incur costs if unredeemed, the digital version works flexibly and saves money. The flexibility of the digital meal voucher allows it to be used for any type of food outlet, be it a restaurant, supermarket or butcher. This form of meal allowance has been possible since 02.02.2016 (BStBl 2016 I p. 238).

Clear advantages over the paper stamp

Digital meal vouchers have the clear advantage that they can be used anywhere, whether in a supermarket, restaurant or delivery service. This is a benefit that companies can make available to their employees, especially in the home office. In addition, digital meal vouchers that are not redeemed do not mean any costs for employers, as only what is actually consumed is charged. Details on the procedure for meal allowances are anchored by the tax authorities in R 8.1 para. 7 no. 4 LStR. According to this, meal allowances of up to € 6.67 per working day (2022) can be taxed as a lump sum at the official non-monetary remuneration value of € 3.57. This results in a breakdown of the meal allowance. This results in a division of the meal allowance into a tax-free and a taxable part. Meal allowances that do not exceed the threshold amount (of € 3.57) can be assessed as a meal taken by the employee with the official remuneration in kind value and taxed at a flat rate of 25%. In the case of lump-sum taxation, the monetary benefit is exempt from social security contributions (§ 1 para. 1 SvEV).

The amount in excess of this, up to a maximum of € 3.10, is a tax-free allowance paid by the employer. Additional payments made by the employee for the meal are to be offset against the taxable value of the benefit in kind.

Rules for employees - According to R.8.1 paragraph 7 LStR

• Food is only considered a meal if it is suitable for immediate consumption or intended for consumption during meal breaks - this also includes drinks if they are usually taken in connection with a meal. Alcoholic beverages are excluded.
• Digital meal vouchers are to be used for the purchase of workday meals only. Meals from digital meal vouchers are intended to be taken within statutory rest breaks. In the case of home office work or a daily working time of no more than six hours, they may also be taken before or after working hours.
• The time at which the meal is taken is decisive for the assessment of whether it is a breakfast, lunch or evening meal.
• The allowance may only be used for lunches and dinners paid for by the employee.
• For each working day and for each subsidized meal (breakfast, lunch or dinner), only one subsidy may be applied at the official non-cash remuneration value. If the employee buys additional meals for other days in advance on the same day, the subsidies granted for this are to be recorded as cash wages and are thus subject to wage tax and social security contributions. The same applies to the individual purchase of components of a meal in stock.

Requirements for quitting

1. If several meals are shown on a restaurant or delivery service receipt, only one meal per employee is recorded. The employee must indicate the meals consumed by him/her on the receipt, e.g. by marking or crossing out.
2. Receipts from different shops may be submitted for each meal if they are combined into one meal. The totalled amount will be reimbursed up to a maximum of the daily value of the digital meal voucher. The employee must mark or highlight the meals consumed on the receipt.
3. Non-food items are specifically not eligible for reimbursement. Examples include washing-up liquid, household items, alcohol and tobacco products.
4. The employee may not submit a receipt more than once.

Conclusion

The taxation of benefits in kind is a complex issue under tax law, as there are many special cases to consider. Not all benefits in kind are the same before the law. Companies are generally advised to ask their tax advisor in advance which employee benefits and which procedure are favorable from a tax point of view in their individual case and mean real added value for all parties involved. In case of doubt, it is advisable to obtain a so-called "Anrufungsauskunft" (information request) in accordance with § 42e EStG (German Income Tax Act), whereby the competent tax office gives a binding ruling on the legal assessment or interpretation of an individual case.