FDD24When sending an employee on a business trip, a company may reimburse per diems, travel and accommodation costs. It is important to know when these amounts are tax-exempt and when they become taxable income.
Per diems and the tax-exempt limit
Per diems for business-trip days are tax-exempt up to the amounts set by the Government, provided the formal requirements are met. If the set amount is exceeded or the conditions are not met, the excess may be subject to personal income tax.
Formal conditions
- the business trip must be properly documented (decision, purpose, period);
- there must be a link to the company's activity;
- costs must be supported by documents.
Travel and accommodation costs
Reasonable travel and accommodation costs are generally reimbursed tax-free, provided they are documented and related to the business trip.
Common mistakes
The most common mistakes relate to improper documentation, per-diem amounts or missing documents. Sound administration of business trips helps avoid additional tax and disputes.