Office drinks are not taxable if available to all employees
The State Tax Service of Ukraine has clarified that beverages for general use in the office are not taxable income for employees. If an employer purchases coffee, tea, or water for all staff, no personal income tax is due on the cost of these items. This is reported by the portal PromPolitInform, citing information from the State Tax Service of Ukraine.
According to the State Tax Service of Ukraine, free provision of beverages to staff does not create additional tax liabilities provided that these products are intended for collective use. Beverages such as coffee, tea, or water from an office cooler, available to all employees and visitors of the building, are not classified as personal income of any specific individual.
General Use vs. Individual Benefit
The Tax Code of Ukraine provides for the taxation of additional benefits received by an employee from an employer. However, this mechanism applies only when a benefit is received by a specific individual. When an employer purchases goods for common use in the premises, they do not become subject to personal income tax, as they do not constitute individual income.
When Compensation Becomes Income
The situation changes if the matter involves individual payments or reimbursement of personal expenses. For example, if a company refunds a specific employee for money spent on purchasing coffee or tea outside the office, such an amount may be considered a supplementary benefit. In such a case, it is subject to separate scrutiny and potential taxation depending on the terms of the agreement.
Absence of Declaration Filing Requirements
Employees who use free beverages in the office are not required to file an annual declaration of property and income status as a result. Provision of coffee or tea at the employer’s expense does not generate tax liabilities for the workforce, provided the products are available for general use within the workplace.
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