Tax & Legal

The Supreme Tax Court has held that the tax-free employee share benefit is restricted to those employees with an actual benefit in the given year and cannot be claimed lump-sum for all employees participating in the programme.

The Supreme Tax Court has held that the benefit from the grant of employee shares is to be based on the value of the shares on the date the transfer agreement became binding on both sides. It also held that there was no automatic presumption that a share transfer to the spouse of an employee was made in consideration for employee services rendered.

The Supreme Tax Court has held that charges for subidised employee parking are subject to VAT, even if the facilities were provided in the employer’s own interest.

The Supreme Tax Court has held that the payment by the employer of a fine levied on an employee cannot be for a valid business reason and is therefore a taxable benefit subject to payroll withholding tax.

The Supreme Tax Court has held that the taxable benefit from the provision of a chauffeur-driven company car to enable an employee to get to work includes the value of the chauffeur’s services.

The finance ministry has issued two decrees on the procedures to be followed during 2013, the introductory period for the online administration and reporting of employee wage withholding tax.

The Supreme Tax Court has held that the return of employee shares at a guaranteed price leads to employment income in the year of return in the amount by which the price exceeds the market value.

The Supreme Tax Court has confirmed its continued acceptance of an upper limit for the costs of employee outings and similar functions, whilst hinting that it might later reconsider its overall approach.

The finance ministry has accepted as a precedent a Supreme Tax Court ruling that a premium paid to a former employee for an invention during his employment should be taxed as a royalty, rather than as employment remuneration, but insists that employers may only apply the principle if they hold an exemption certificate from their local tax office.

The Supreme Tax Court has held that the returnable surplus of an employee relief fund is to be based on the total obligations of the fund, rather than on those in respect of individual member employers.

The Supreme Tax Court has held that payments from an employee relief fund in fulfilment of its purpose are deductible as business expenses if the fund is charged to corporation tax on an excess of assets.

In a recently published decision, the Supreme Tax Court has, in some aspects, facilitated the tax recognition of employee-financed pension commitments for shareholder managing directors of a limited liability company (GmbH) but at the same time it also set some limits.

Following a polish request for a preliminary ruling the European Court of Justice held that an employee using employer’s details to issue fake invoices is liable for VAT incurred thereon. Such is the case if the employer, who is a taxable person for VAT purposes, has exercised the due diligence reasonably required to monitor the conduct of its employee.

The finance ministry has issued a decree on the circumstances under which employee discounts received from third-party suppliers may be regarded as taxable benefits from their employment.

The Supreme Tax Court decided that the taxable benefit from private use of a company car may not be reduced by parking costs borne by the employee. The provision of a parking space or garage free of charge is considered separate to the benefit in kind of using a company car for private trips.

The finance ministry has instructed tax offices to follow the Supreme Tax Court in allowing employees to value their benefit from subsidised staff purchases under the general rules for benefits in kind, if more favourable.

In a judgment published today the Supreme Tax Court clarified that companies can cover the costs of farewell parties for departing employees without incurring tax disadvantages as long as the event is organized as a company event.

The supreme Tax Court has held that a tax office opinion on tax to be withheld from employees’ salaries should address the facts as presented and should not be obviously incorrect. However, the employer cannot use the procedure for the clarification of legal doubts.

The Supreme Tax Court has held that an employer’s pension fund contribution paid on behalf of an employee is not taxable merely because it was described as a payment on behalf of the employee.

Recurring remuneration from an employee's mandatory employee profit participation right (PPR) is not generally covered by the provisions of Section 19 (1) sentence 1 no. 1 Income Tax Act (ITA) for income from employment. This was decided by the Supreme Tax Court in a most recently published judgment.