CA 2180/21 Director of VAT Netanya v. Amdocs Israel Ltd.
CA 2180/21 Director of VAT Netanya v. Amdocs Israel Ltd. (Nevo 30.01.2023):
The Director of VAT Netanya appealed the judgment of the Central District Court in Lod, in proceedings designated as TA 22467-09-17 Amdocs Israel Ltd. v. Director of VAT Netanya (Nevo 17.12.2020). The Supreme Court dismissed the VAT authority's appeal and accepted Amdocs's position and the judgment of the Lod District Court regarding the application of Regulation 15A of the Value Added Tax Regulations, 5736-1976, which concerns input tax deductions, with respect to areas used as kitchens and for serving meals to Amdocs employees. Adv. Shlomi Vaknin represented Amdocs, which prevailed in both the District Court and the Supreme Court.
District Court:
TA 22467-09-17 Amdocs Israel Ltd. v. Director of VAT Netanya (Nevo 17.12.2020):
The appellant appealed against a tax assessment in which the VAT Director disallowed the deduction of input tax for all expenses attributed to the dining halls and kitchens serving the appellant's employees (including rent, electricity, water, and similar expenses). The Court allowed the appeal and held in its judgment, through thorough and extensive analysis, that inputs exclusively related to meals provided by the employer to its employees include raw materials, kitchen equipment, cooking and baking work, tables, chairs, tableware, dishwashing, table cleaning, and dining hall floor cleaning, and that all of these are an integral part of the term "meal" for the purposes of Regulation 15A. However, inputs paid by the employer in connection with the premises where the meal is served — in this case, the proportionate share of Amdocs's leased building designated to serve as employee dining halls — are not considered part of the term "meal" for the purposes of Regulation 15A of the Regulations, and therefore do not constitute a non-deductible employee benefit.
