Employees, particularly corporate executives, often receive additional non-cash benefits such as a corporate car, shares, free attendance of their children in private schools, etc. beyond their salary.
According to the Income Tax Code, all benefits either in cash or in kind are taxed as income from paid employment, except those explicitly excluded by law.
In particular, benefits in kind received by an employee or a relative are included in his taxable income if their total value exceeds EUR 300 per fiscal year. However, the following benefits are taxed irrespective of their value:
Company car. The taxable income of an employee, partner or shareholder from being granted a company vehicle is calculated as a percentage of the vehicle's retail pre-tax value based on specific rates. The value of the benefit is calculated in proportion to the months of use of the vehicle.
Exceptionally, vehicles that are granted exclusively for business purposes, e.g. to vendors, medical visitors, etc. and if they have a retail pre-tax value of up to € 12,000, are not considered taxable benefits in kind.
Mobile phones. The provision of the use of a corporate mobile phone connection to employees, administrators and management members is taxed to the extent that it exceeds the cost of the program of use and provided that the excess amount is used for personal purposes and not for the purposes of the enterprise.
That distinction is possible through the analytical phone bill issued by the mobile operator or on the basis of a relevant certificate from the employer.
Loans. In the case of a written loan agreement from the employer-to-employee or partner or shareholder, taxable income arises if the agreed interest rate is less than the average market rate. Income is taxed on the difference between interest rates. However, if there is no written loan agreement and if the amount exceeds three (net) salaries, the total amount is considered to be taxable income.
In terms of stamping, however, any advance payment (which is not offset in the same month as the salary) is treated as a loan and is subject to stamp duty of 2.4% or 3.6%, as the case may be.
Stock options. The value of the benefit is determined at the time of the exercise of the option or transfer right and not at the time the right is granted. Therefore, the relative income may also arise at a (later) time when the employment relationship no longer exists.
This benefit is valued at the closing price of the share in the (Greek or foreign) stock exchange, reduced by the price of the right to the beneficiary. The relevant provision covers the rights exercised from 1 January 2014 onwards regardless of when that right was granted.
Residence. In the case of providing a residence to an employee or a partner or shareholder of an enterprise, taxable income is the amount of the rent paid by the enterprise or, in the case of a privately owned home, 3% of the fair value of the property.
However, the provision of accommodation/residence to employees as a result of their temporary transfer to branches or workplaces or other occupational facilities of the employer in the course of their work, is not taxed.
Exemptions. There are some benefits in kind that are exempt from taxation.
More particularly, the following benefits are not taxed:
- The premiums paid by the employee or the employer on behalf of the employee in the context of group retirement insurance policies.
- The premiums paid by the employer for the medical and hospital coverage of his / her employees or for covering the life risk under an insurance policy up to the amount of EUR 1,500 per year per employee.
- The value of food spending of up to € 6 per business day.
G. Samothrakis, J. Panou
Posted on Sunday newspaper Kathimerini, 22/10/2017