It looks like the old saying is true – the free lunches that companies like Facebook and Twitter offer employees may come to an end, after attracting IRS scrutiny.
Employees at technology companies like Twitter, Facebook and Google may have to say goodbye to their free lunches.
Business Insider Australia reported that according to tax lawyers at technology startups, the Internal Revenue Service has begun clamping down on the Silicon Valley companies’ gourmet cafeterias and chasing free meals as a taxable fringe benefit.
Theoretically, the workers could be liable to pay tax on the free food they have eaten if it was deemed as income, the article said.
But it was more likely that the companies would have to pay back taxes.
If the free meals are classed as fringe benefits, companies could have to pay 30% of the meals’ fair market value in tax, which could be a lot of money for some – Facebook has several free restaurants on its California campus and other companies have in-house gourmet chefs.
“While no guidance or decision has been announced on the taxation of meals, it could cause many Silicon Valley startups to think twice about offering gourmet lunches to employees,” the article said.
What’s the best work perk you’ve ever had?
Business Insider Australia reported that according to tax lawyers at technology startups, the Internal Revenue Service has begun clamping down on the Silicon Valley companies’ gourmet cafeterias and chasing free meals as a taxable fringe benefit.
Theoretically, the workers could be liable to pay tax on the free food they have eaten if it was deemed as income, the article said.
But it was more likely that the companies would have to pay back taxes.
If the free meals are classed as fringe benefits, companies could have to pay 30% of the meals’ fair market value in tax, which could be a lot of money for some – Facebook has several free restaurants on its California campus and other companies have in-house gourmet chefs.
“While no guidance or decision has been announced on the taxation of meals, it could cause many Silicon Valley startups to think twice about offering gourmet lunches to employees,” the article said.
What’s the best work perk you’ve ever had?