Tax alert July 2021 #3

ON WEDNESDAY, 14 JULY, 2021, THE GOVERNMENT ADOPTED AMENDMENTS TO THE DECREE ON TAX TREATMENT OF REIMBURSEMENTS OF EXPENSES AND OTHER INCOME FROM EMPLOYMENT (THE "DECREE"), WHICH WERE YESTERDAY PUBLISHED IN OFFICIAL GAZETTE.  

As we informed you in our Tax Alert on 5 July 2021 the Government published in the Official Gazette on 1 July 2021 amendments to the Decree, which were now changed.

Below, we summarize the new changes:

• Reimbursement of transport costs to and from work is considered as tax free up to EUR 0.18 for each full kilometre between habitual residence and place of work for each day of presence at the workplace, if the place of work is at least one kilometre away from habitual residence of the employee.
• Reimbursement of the cost of transport to work on the basis of the value of a non-transferable registered ticket for public transport is abolished.
• The amendment introduces a provision stipulating that if the reimbursement of the monthly transport cost for an individual is less than 140 EUR, the non-taxable amount is considered the amount of 140 EUR, based on the general rule in the first point above. Nevertheless should the amount of milage be greater than 140 EUR and is such amount is also not considered as taxable income and as such not included into the tax base of employment income.
• According to the new Regulation, the reimbursement based on of public transport is abolished, and the provision on reimbursement of transport and the amount of reimbursement of costs for individual employed by foreign employer is been also withdrawn.
• The Regulation has also amended its applicability, as such new rules are in force for salaries for September 2021. Accordingly, for months of July and August the provisions of currently valid Regulation apply.