Income Tax Act - amendments as of 01 January 2018
According to the latest amendments to the Income Tax Act, water, hot and cold beverages (other than drinks with alcohol content) that the employer provides to his employees during the working hours at his own expense, shall not be deemed income from employment (salary).
If the expenses constitute representational costs, 50% is tax deductible, and if it is expense for drinks for the employees, 100% of the cost is tax deductible. For the purpose of recognizing employee costs as tax deductible, the consumption during the working hours must be reasonable, as otherwise during a possible tax inspection it may be considered as employees’ remuneration in kind.
Expenditures for the purchase of water intended for drinking during working hours, be it tap water or packaged water, may be considered as expenditures in the interest of the employer's business. It is therefore considered that businesses are entitled to deduct input tax for water.
In the opinion of the Tax Administration, the input tax for the purchase of juices and other hot and cold beverages is NOT deductible.