14.04.09

A company gave juice to its employees in accordance with labor agreements. The Tax Authorities, after reviewing the operation, concluded that supplying employees with juice should be considered a compensation-free transfer. According to paragraph 1, clause 1 of Article 146 of the Russian Tax Code, compensation-free transfers are a sales transaction, and as such, are subject to VAT . The Federal Arbitration Court of the Western Siberian district, after examining this dispute, has concluded that provisioning workers with a therapeutic and prophylactic diet (juice) within the context of labor relations is not a compensation-free transfer as defined by Chapter 21 of the Tax Code.

In this case, the transfer of property between employer and employee has not occurred. Hence, it is not subject to taxation under VAT.

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Source: Российский налоговый портал