Lunch breaks are no longer tax-free. How much tax you pay depends on whether you pay yourself or use a company card. And the difference can be great.
All Norwegian employees must now pay taxes for food after the rules were changed. And you can lose a lot of money if you pay first and get the bill refunded afterwards.
The tax will be much higher if you pay with your own card instead of a company card, i.e. a payment card for which you pay the bill, but for which the employer is responsible.
For some, it could mean as much as five times the tax.
‘In simple terms, an employee who receives reimbursement of expenses for food will be taxed for what is actually refunded,whereas a person paying with company cards will be taxed according to set rates for free lunches,’ explained Espen Øren of the information services company, Infotjenester.
The rates are 45 kroner for one meal, 69 kroner for two meals, and 88 kroner for all meals.
Øren referred to an example where a salesperson travels 230 working days in a year, and eats lunch for 100 kroner each day.
If the worker pays for the food themmself, they will be taxed for 23,000 kroner. However, if they use the company card, they will be taxed for 10,350 kroner.
Great difference for weekly traders
The reason for the difference is that payment with company cards is considered to be a natural benefit. Then the valuation is based on current rates, not the value of the meal. The same rules apply to company cars, and free phone calls.
The differences will be even greater for weekly shoppers, which the FriFag Movement has previously brought to the public attention.
A weekly commuter who receives three meals for 500 kroner the day will get away with around 10,000 kroner in tax if he uses a company card. The amount will be around NOK 53,000 if he pays and gets the bill refunded afterwards (i.e. 530% more in tax).
The employer’s social security contributions are also greater if you choose to pay with a company card instead of receiving a refund.
© NTB Scanpix / Norway Today