Social Insurance compliance in respect to Benefits in Kind

Implications of the upcoming changes in respect to Benefits in Kind


*by Theodoros Mantis

Considering the intense competition between businesses, employers started offering a
wide range of Benefits in Kind ‘BIK’ (usage of corporate and private cars, shares
purchase plans, usage of assets, meals, gifts, relocation expenses, traveling expenses,
etc.) aiming to attract skilled and qualified staff, and ensure work satisfaction, boost
morale and improve productivity and profitability.
However, due to the uncertainty of the legislative framework of the tax treatment of the
BIK, common practice and judgmental approach are followed leading employers to non-
compliance with the legal framework, exposing them to financial and other risks. To
address this ambiguity in the legislative framework, in October 2017, the Tax
Department issued a draft informative document for public consultation on BIK.
The ultimate purpose of the Tax Department is the issuance of a formal analytical
circular clarifying the meaning of the various BIK as well as the method of their
quantification and taxation in order to assist companies to understand the treatment
that has to be followed with the aforementioned benefits. This circular is expected to be
officially announced by the end of this year. Currently, the content of the draft circular
as published by the Tax Department is descriptive, comprehensive and easily applicable
by the general public. However, companies have to consider the possible Social
Insurance implications.
It should be noted that for the clarification of the treatment of BIK, the Social Insurance
Services are taking into consideration the information submitted to the responsible
department since each case may be treated differently. Currently, due to the absence of
a general reference interpretation about BIK, gratuities, ex-gratia payments
(Administrative Court – Case No. 74/2015) as well as the upcoming amendments which
arise accordingly to the draft circular of the Tax Department, several companies are
requesting the assistance of a specialist in this field, in order to receive the proper
information and guidance on the Social Insurance treatment of the above-mentioned
benefits and/or other payments and minimise potential financial and other compliance


* Head of People Advisory, Corporate Immigration & Payroll Services, Ellinas Finance