Redesign the current system of fringe benefits by trying to standardize it to a single ceiling (the threshold studied would be between 1,500 and 2,000 euros) for everyone. This is the hypothesis that, according to parliamentary sources, is being worked on by the majority, which, given the good progress of this bonus, aims to confirm the measure in the next budget law. The last budget law raised the exemption limit for fringe benefits to 2,000 euros for workers with dependent children and to 1,000 euros for everyone else (opening the possibility of also using it to pay rent or mortgage on the first home).
Was sind Fringe Benefits
Fringe benefits are goods or services offered to employees in addition to their net salary. They are essentially a benefit in kind granted by the employer and are concretized by the provision of goods and services that are added to the salary. But be careful, this form of additional benefit in kind does not contribute to the formation of the employee’s income, up to certain limits established by the regulations.
Taxation
This means that the economic value of the fringe benefits is not taxed until it reaches a certain amount. Essentially, on the one hand, the fringe benefits create an advantage for the employees who receive a service whose economic value is not taxed. On the other hand, the costs borne by the employer are fully deductible. From the employer’s point of view, it is therefore optimal to provide these services, since some of them, such as meal vouchers or canteen vouchers, are fully deductible. Except for some exceptions such as motor vehicles.
The current borders
The 2024 Budget Law introduced some novelties and changed some rules. Exclusively for this year, the taxable amounts were modified. In 2023, they were exempt from tax up to a maximum of 258.23 euros for the majority of workers; 3,000 euros for workers with dependent children. From the beginning of 2024, the limits were set as follows: for the majority of workers: 1,000 euros; for workers with dependent children: 2,000 euros. The amount provided for dependent children was reduced, while the amount provided for the majority of workers was increased.
The dependent children
Until when are children considered dependent? The relief also includes children born outside of marriage, provided they are duly recognized, as well as adopted or foster children. To be considered dependent, the children must have an income: less than 2,840.51 euros; less than 4,000 euros for children up to 24 years old. This condition must be met by 31 December 2024. If a child is supported by both parents, the corresponding relief is available to both parents. This means that the total amount of fringe benefits can reach 4,000 euros (by adding the fringe benefits of both parents).
The deduction is available if the child is supported for tax purposes by the parent. Even if the deduction is allocated 100% to a single parent. The tax authority has focused on the fact that payments for household utilities, i.e. for integrated water supply, electricity and natural gas, are also included in the tax-free fringe benefits until 2023. These rules also apply for 2024.
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