Denis Foks, attorney-at-law, and Emil Gierasimowicz, tax advisor, commented for Business Insider on the groundbreaking judgment regarding the qualification of tips given to waiters via a payment terminal.
This concerns the judgment of the Provincial Administrative Court in Warsaw in the case of one of the restaurant chains. - However, the judgment may have a significant impact on the entire catering industry - argues Emil Gierasimowicz, a tax advisor at BTTP, the law firm representing the restaurant chain in court. The expert explains that until now the tax authorities considered that a tip paid by card together with a bill for a meal is income from the employment relationship of a waiter. The Provincial Administrative Court in Warsaw ruled that the tax authorities' interpretation was incorrect.
As Denis Foks, legal advisor at BTTP, explains, in the case of income from other sources, the company does not have to collect PIT advances on such tips and social security and health insurance contributions are not collected from them.
— The judgment of the Provincial Administrative Court, although not yet final, may constitute a breakthrough in the current approach of tax authorities regarding the qualification of tips transferred via a payment terminal as the proper source of revenue — Emil Gierasimowicz assesses. He emphasizes that the tax authorities have based their previous position and the qualification of tips to income from an employment relationship on criteria that are not included in any legal regulations. — There is no provision in the Personal Income Tax Act that makes the classification of a given benefit as employee income dependent on the form of its transfer. Despite this, tax authorities in similar cases took the position that "all kinds of payments" should be included in income from an employment relationship, as long as they physically flow through the employer's terminal, regardless of whether these benefits actually result from an employment relationship or not. It is therefore pleasing that the Provincial Administrative Court in Warsaw has also noticed this - comments Denis Foks.
The expert points out that this does not change much in the tax settlements of the waiters themselves, who must settle PIT on tips received in cash or non-cash anyway. However, importantly, tips settled as part of other sources of income will not be subject to contributions.
We encourage you to read:
https://businessinsider.com.pl/prawo/podatki/jak-rozliczac-napiwki-zapadl-wazny-wyrok/hcmhp9y
