What does this practically mean? Simply put, two conditions must be met:
- on the number of employees that have the opportunity to participate = 70% of all the employees, as well as the condition
- on the number of employees that have actually participated = 70% of the employees who had the opportunity to participate.
However, if due to a large number of employees, physical or functional division of business and organizational units and other particularities of the company’s business activities the company organizes several individual sport events or activities, whereby their type and scope may vary in relation to such circumstances and particularities, the requirements are considered to be met if at least 70% of the total number of employees of the respective business year are entitled to participate in such events or activities.
Companies are required to provide the appropriate documentation as evidence, containing information on the sent invitation to sport events and activities and attendance.
It should be particularly emphasized that those employees prevented from participating in such activities (due to sick leave, vacation leave and other reasonable grounds for absence from work), are included in the total number of employees who have used the right to take part in such events or activities, provided that such employees provide adequate evidence on their grounded and justified absence from the teambuilding.
Are contributions calculated in the event when conditions for tax exemption are fulfilled?
The answer is no!
If the fulfilled conditions under which a tax exemption may be achieved on the basis of organizing the aforementioned activities, the employer, besides being exempt to income tax, during these disbursements, is not obliged to calculate the obligatory social security contributions, in accordance with the social contributions legal regulations.