Favorable changes in the way of taxation of benefits in kind (cars, stock options, etc.) that employees receive from their employer in the context of their employment relationship are provided by the recent tax law. Specifically, the method of calculating the taxable value of the concession of a vehicle to an employee or partner or shareholder was redefined, for any period of time within the tax year, the procedure for corporate loans and even for benefits in kind is changed based on the value of the amount. According to a circular of the Independent Public Revenue Authority:
1. Benefits in kind based on value: In case the value of the benefit in kind to employees, partners, shareholders or their relatives exceeds 300 euros per tax year, the taxable income from paid employment of the liable natural person will be take into account only the excess, in excess of 300 euros, amount of the value of the benefit and not the total
2. Loans: For benefits in kind in the form of a loan, regardless of whether the contract has been entered into in writing or not, the amount of the benefit consists of the difference between the interest to be paid by the employee or partner or shareholder during the calendar month who received the benefit, if the interest rate was the average purchase rate in the same month and any interest paid by the employee during that calendar month. Even in cases where the loan has not been enclosed in the form of a written agreement, the difference in interest arising from the above is taken as the benefit in kind and not the total principal of the loan, as was the case with the previous provisions. It is up to the parties to prove both the existence of the loan and the terms of the loan agreement.
3. Wage advances: Wage advances that exceed 3 salaries are considered a loan. Regardless of their amount, wage advances are not considered a loan when they are paid in full, against the corresponding future wages, ie for the following months the employee will not be paid his wages until the amount of the advance is fully amortized. Conversely, in the event that salary advances are repaid through monthly deductions from the employee’s salary, they are considered a loan and therefore constitute a benefit in kind to which the above provisions apply.
For example, if an employee with a monthly salary of 1,000 euros receives an amount of 2,500 euros (2.5 salaries) from his employer in March as a salary advance and it is agreed that he will not be paid any salary for the following months until that amount is repaid. More specifically, he will not be paid salaries for April and May while in June he will receive reduced salaries (500 euros). In this case, the total amount of 2,500 euros is not considered a loan and therefore does not constitute a benefit in kind, as there is no repayment by monthly deductions, due to the fact that the employee receives remuneration in the last month (June) after it has been fully amortized. the amount due.
For salary advances that constitute a loan as an average purchase interest rate to determine the difference in interest, the lowest interest rate of each loan category is taken, as defined by the Bank of Greece, during the month of granting the advance.
4. Cars: The calculation of the benefit in kind in the form of the concession of a vehicle to an employee or partner or shareholder, is now done by applying a progressive scale on the Retail Price Before Tax (LTPF) of the vehicle, if this price exceeds 17,000 euros .
The rates will be:
* 4% for the part of the PPP from 0 to 14,000 euros,
* 20% for the part of LPTF from 14,001 to 17,000 euros,
* 33% for the part of LPTF from 17,001 to 20,000 euros,
* 35% for the part of LTPF from 20,001 to 25,000 euros,
* 37% for the part of LTPF from 25,001 to 30,000 euros,
* 20% for the part of LTPF over 30,000 euros.
Not considered as benefits in kind, vehicles that are granted exclusively for business purposes and have an IPR of up to 17,000 euros, instead of 12,000 euros, which was valid. If these vehicles have a GVA of more than 17,000 euros, then a benefit in kind is calculated for them based on the total GVA.
EXAMPLE: For a car 27,000 euros LTF the value of the concession (supply in kind) is calculated as follows:
3,900 for the part of LTPF up to 25,000 euros and
– for the remaining 2,000 euros of LTPF additional amount 2,000 X 37% = 740 euros. Total: 3,900 + 740 = 4,640 euros.
If the vehicle is 5 years old, then the value of the concession (4,640 euros) is taken reduced by 10% (ie: by 464 euros) and is set at 4,176 euros.