Organizing a teambuilding should not be considered a free service by companies, so that the obligation to collect VAT would arise, believes the Chamber of Tax Consultants (CCF), which sent an address to the Ministry of Finance requesting clarification on this matter.
In the opinion of CCF, including analyzing the case law of the Court of Justice of the European Union (CJEU), teambuilding is a strategic tool for increasing the company's productivity and efficiency, its main purpose being to improve employee performance by improving their well-being, and the employee's own benefit related to participating in teambuilding is considered accessory to the main benefit.
The main purpose of employees participating in teambuilding is not the benefit brought to them, but rather it is a management approach with the main purpose of improving relationships between team members and developing collaboration, this being important for the performance management system within companies, the organization believes.
"By the sent address, the Chamber requests the Ministry of Finance to confirm whether VAT can be deducted for purchases made for the purpose of organizing a teambuilding (transport services, accommodation, event organization, etc.) since organizing such an event benefits the company's economic activity. At the same time, the company is not obliged to collect VAT as long as: the activity is recommended by the human resources department in order to strengthen employee motivation, having positive effects in terms of performance and profitability; the company has control over the use of the services it benefits from, since the employee does not have the possibility to choose any aspect related to the organization of such an event (date, location, etc.)", the Chamber of Tax Consultants' press release states.
In the opinion of CCF, companies have the right to deduct VAT on purchases made in connection with the organization of a teambuilding event since these purchases are made in close connection with the companies' economic activity, a fact confirmed by the Court of Justice of the European Union.
The Chamber of Tax Consultants is a professional organization of public utility, a non-profit legal entity, with its own assets and budget. It is made up of tax consultants, assistant tax consultants who have acquired this qualification, as well as tax consulting companies, authorized by the Chamber, under the conditions provided for by O.G. no. 71/2001, regarding the organization and exercise of tax consulting activity, with subsequent amendments and completions.
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