An internationally active factory construction company pays its employees fixed night allowances for air travel that began at night – on the basis of the provisions of the collective agreement. Payments of this type are tax-free such as allowances for travel expenses up to a maximum of 15 euros if they are obligatory to be paid by the employer due to a regulation fixing wages (eg collective agreement). Against this background, fixed night allowances were treated as tax deductible. However, this tax credit was denied as part of the GPLA examination on the grounds that employees did not actually incur overnight accommodation costs due to the possibility of spending the night on board.
On February 3, 2022 (Ro 2020/15/0005), VwGH determined that the tax exemption applies regardless of whether employees have already incurred actual expenses, such as the use of airport lounge wet areas, which are subject to a fee. As a result, if a collective agreement provides for payment of overnight stays to employees in connection with overnight trips, they can be treated tax-free up to the current statutory limit of €15. As a first step, companies with a similar volume of business trips should check how much affected employees are paid for overnight stays for overnight trips due to pay regulations. As part of payroll accounting, it should then be ensured that the exemption occurs in accordance with VwGH’s case law.
Mag. Matthias Mitterlehner is Partner, Head of International Tax Division and Tax Advisor at ICON Wirtschaftstreuhand GmbH.
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