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To begin with, it is worth recalling that
under the Act of 4 March 1994 on the Company Social Benefits Fund (the ZFŚS Act), social activities are defined as services provided by employers in the areas of holidays, culture, education, recreation, childcare, material assistance and housing support on terms set out in an agreement (Article 2(1)).
Under Article 8 of the ZFŚS Act, granting discounted services and benefits from the fund depends on the eligible person's living, family and financial circumstances. In practice, this means that rules and criteria for granting employee benefits must be defined.
When social activities are funded from working capital, the employer controls the allocation of the funds. However, costs must be analysed under Article 15(1) of the Corporate Income Tax Act to justify them.
Remember that benefits financed from the ZFŚS cannot be treated as tax-deductible costs. Instead, employer contributions to the fund may be recognised as costs under Article 16(1)(9)(b) of the Corporate Income Tax Act. This makes settlement much easier and broadens the range of tax costs in line with what can be financed from the ZFŚS. It is certainly a very beneficial solution for both an employer funding various social expenses and an employee.
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When establishing a Company Social Benefits Fund (ZFŚS),
the employer must maintain a separate bank account, which may generate additional costs of administering the fund. Such costs, including bank fees, are tax-deductible.
The benefits employees receive from the ZFŚS are considerable, especially when some benefits are tax-exempt under Article 21(67a) of the Personal Income Tax Act. However, tax exemption limits apply.
In summary, having no company social benefits fund makes it easier for an employer to provide social benefits, avoiding benefit-allocation limits and rules and additional fund administration costs. For employees, receiving ZFŚS benefits can be more advantageous, especially when they are tax-exempt.
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