Pursuant to subsection 1 of § 48 of the Income Tax Act, employers pay income tax on fringe benefits granted to employees.
Based on clause 7 of subsection 1 of § 2 of the Social Tax Act, social tax is paid on fringe benefits within the meaning of the Income Tax Act, expressed in monetary terms, and on income tax payable on fringe benefits.
Declaration
The period of taxation of fringe benefits is one calendar month. The employer declares the fringe benefits granted to employees and income and social tax calculated on fringe benefits during a calendar month in Annex 4 of the form TSD, which must be submitted together with the form TSD to the Tax and Customs Board by the 10th day of the month following the calendar month in which the fringe benefit was granted. The tax amount is paid to the bank account of the Tax and Customs Board by the same date at the latest.
Legal basis
Handbook - taxation of fringe benefits
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Private use of cars
If a car used in business is also for private use, regardless of whether the employee reimburses the costs related to the use of the car or not, the use of such a car is not considered to be used exclusively for business purposes.
This procedure also applies to companies the field of activity of which is granting cars to use, and which provide cars for their employees to use for a charge.
To avoid double taxation, the private use of a car is not taxed as self-supply and granting the use of a car for a charge to an employee, servant or member of a management and control body of the taxable person is not considered supply.
The use of a company car for personal rides is taxed with a fringe benefit based on the vehicle's capacity.
Last updated: 27.10.2023
Last updated: 09.04.2024