Pursuant to subsection 1 of § 48 of the Income Tax Act, employers pay income tax on fringe benefits granted to employees.
Based on clause 7 of subsection 1 of § 2 of the Social Tax Act, social tax is paid on fringe benefits within the meaning of the Income Tax Act, expressed in monetary terms, and on income tax payable on fringe benefits.
Declaration
The period of taxation of fringe benefits is one calendar month. The employer declares the fringe benefits granted to employees and income and social tax calculated on fringe benefits during a calendar month in Annex 4 of the form TSD, which must be submitted together with the form TSD to the Tax and Customs Board by the 10th day of the month following the calendar month in which the fringe benefit was granted. The tax amount is paid to the bank account of the Tax and Customs Board by the same date at the latest.
Legal basis
Handbook - taxation of fringe benefits
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Participation fees in public sports events
Participation fees related to public national sports events, which can be attended by anyone (taking into account understandable restrictions set by the organiser, e.g. the number of participants, the obligation to pay the participation fee, etc.) regardless of the employee's employer, are not taxed as a fringe benefit. Public national sports events mean various public series of events and individual events.
Public national sports events are not, for example, company sports days or similar events aimed at a narrower target group, which usually require employment with the employer organising the event or a relationship under the law of obligations. Public sports events are also events that are aimed at sports activities between employees of companies (exercise, competitions). For example, a sports competition organised for employees of IT companies, tournaments between different companies (e.g. volleyball or basketball tournaments). A public national sports event is characterised by public notification, participation schedule, rules, comparison of results (for example, scoring) between participants (companies and/or people), recognition of the best.
Example 1
Public national sports events are, for example: Narva City Run, Night Run Estonia, Tallinn Marathon, LHV Women’s Run, the Great Race around Lake Viljandi, Tartu City Marathon, Saaremaa 3-day Running Marathon, Tammsaare national hike, Ekström March in Lahemaa, etc.
Example 2
The employer buys a hiking tour (not a public event) for its employees from a service provider. The employer's employees can participate in the hike purchased by the employer. The costs of hiking tours and hikes are not treated as tax-exempt health improvement costs.
Last updated: 26.02.2024
Last updated: 09.04.2024