Subject: Whether Exemption from Income Tax Applies in the Case Where Some Employees Are Provided Meals at the Workplace and Others Are Given Meal Cards

In the request form referenced, it is stated that your company provides meal opportunities to employees at all stores except for the headquarters and certain stores. Due to the lack of meal provision at the headquarters and some stores, employees are given meal cards through the contracted meal card company, … Corporate Services Inc., and meal payments are made to these meal cards based on the employees’ monthly working days. The request is to determine whether these payments made through meal cards are exempt from income tax under Article 23, paragraph 1, subparagraph (8) of the Income Tax Law.

Article 61 of the Income Tax Law No. 193, titled “Definition of Wages,” states: “Wages are the money and benefits provided as compensation for services rendered by employees under the control of an employer and at a specific workplace, and benefits that can be represented by money.

The nature of the wages is not altered whether they are paid under different names such as allowances, compensation, cash indemnity (financial liability indemnity), allocation, bonus, advance, membership fee, honorarium, commission, premium, or any other name, or if they are determined as a certain percentage of profits, provided that it is not in the nature of a partnership relationship.”

Article 94, paragraph 1, of the same Law specifies the taxpayers required to withhold tax, and in subparagraph (1) of the same paragraph, it is stated that tax withholding must be done on wages paid to service employees and payments considered wages under Article 61 (except those benefiting from exemptions), according to Articles 103 and 104.

In subparagraph (8) of Article 23, paragraph 1, as amended by Article 2 of Law No. 7420, it is stated: “Benefits provided to service employees through meals given by employers (in cases where no meals are provided at the workplace or its premises, the portion of the daily meal cost not exceeding 51 Turkish Liras (170 TL for 2024 according to General Communiqué No. 324) is exempt. Any amount exceeding this limit and other benefits provided for this purpose are subject to income tax as wages).”

The necessary explanations regarding this matter are provided in the General Communiqué on Income Tax No. 322, published in the Official Gazette No. 32059 (2nd repeated) on 30/12/2022, under the section titled “Exemption on the Meal Allowances Provided by Employers to Service Employees” in the second section:

  • In Article 3, titled “Application of Exemption for Benefits Provided by Employers through Meals to Service Employees,” it is stated:
    • “(1) In benefits provided through meals without cash payment: a) Benefits provided by employers to service employees at the workplace or its premises are not limited to any amount, b) Benefits provided by employers through meals purchased from service providers without any limit on the amount, c) When meals are not provided at the workplace or its premises, and if the services are provided by businesses offering such services, payments made to these businesses, for each employee, for the daily meal cost not exceeding 51 Turkish Liras (170 TL for 2024), ç) When no meals are provided at the workplace or its premises and the meal service is provided through meal cards or vouchers, for each employee, for the daily meal cost not exceeding 51 Turkish Liras (170 TL for 2024),

    are exempt from income tax, and explanations for the application of these exemptions are provided in the General Communiqué on Income Tax No. 186, published in the Official Gazette No. 22355 on 26/7/1995.”

According to these provisions and explanations, if employees working at the headquarters and … stores, where no meal service is provided at the workplace or its premises, do not have the opportunity to benefit from the meal service provided by your company, the meal payments made to the meal cards through the contracted meal card company, … Corporate Services Inc., can be considered exempt from income tax under Article 23, paragraph 1, subparagraph (8) of the Income Tax Law, provided that the daily amount for the actual working days does not exceed the limit set for the relevant year (170 TL from 01/01/2024).

Source: Revenue Administration of Republic of Türkiye
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