Magazine: Service fee taxes
According to information from the National Tax and Customs Administration (NAV), the service fee won’t be free from social contribution payment obligation if legislators don’t amend the relevant law. In accordance with 65. § of Act 127 of 2007 (VAT Act), the service fee forms part of the restaurant and hospitality service tax base, and the same tax rate applies to it. The bill issued to customers must indicate the service fee as a separate item.
Taxes and contributions must be deducted from the service fee before the sum is paid to the employees doing the service work. As for distributing the sum among the workers, the proportions must be laid down in writing, in the form of an agreement between the hospitality unit’s operator and the organisation that represents the interests of the workers at the workplace. //
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