Employment collective agreement and additional employee benefits without tax liabilities  

On 15 November 2021, the Parliament [Saeima] passed amendments to the Law “On Resident Income Tax”. Along with these amendments becoming effective on 1 January 2022, conclusion of the employment collective agreement allows to exclude from the PIT taxable income not only employee’s catering expenses in the amount of EUR 480 annually (on average EUR 40 per month), but also employee’s medical treatment expenses within the same limit.

The payment for the use of medical services needs to be supported by document that shall be submitted and stored with the employer.

Employment collective agreement allows the company to recognise event expenses referred to in the collective agreement (for example, costs of tea, coffee, fruits and other beverages and snacks) as operating expenses that are not personified.

It should be noted that tax liabilities do not arise in relation to the above expenses provided that these expenses do not exceed 5% of the total gross salary of the employees calculated in the previous reporting year for which social insurance contributions have been paid. “

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