Tax-exempt allowances in 2021 for business travel

Date of issue
11/24/2020
Record no.
Dnro VH/7555/00.01.00/2020
Validity
1/1/2021 - Until further notice

Under § 73 and § 75.2 of Income Tax Act (tuloverolaki) of 30 Dec 1992 (1535/1992), including the amendments by Act no 504/2010 and by Act no 1246/2013, the Finnish Tax Administration has set out the following:

§ 1

The criteria for and amounts of allowances for travel expenses, to be considered exempt from tax in the 2021 taxation, shall be as prescribed in this decision below.

§ 2

Travel expenses are the costs arising from a taxpayer's business travel in the territory of Finland or other countries.

§ 3

Business trips mean any short-term trips by an employee in performing his duties to a place where he temporarily performs working tasks or conducts business, distinct from his regular place of work. If, because of the nature of his work, the employee has no regular place of work, any short trip by employee from home to a temporary place of employment is a business trip.

Furthermore, trips under the following circumstances are also regarded as business trips:

  1. Location of the workplace is elsewhere than inside the facilities or establishments that belong to the employer or to a closely related corporate entity within the employer’s sphere of interest;
  2. Work falls into the definition of temporary work under § 72 a, Income Tax Act (tuloverolaki);
  3. Location is at a distance exceeding 100 kilometres from the taxpayer’s home;
  4. Taxpayer has stayed overnight, due to the trip to the workplace, in temporary quarters, which are necessary because of the distant location of the workplace.

Nevertheless, travelling or commuting between home and regular place of work is not considered a 'business trip' or 'travelling in business'. This also concerns weekend travel or other similar travel between home and a temporary place of employment, during a longer work assignment spanning several work weeks.

If it is typical for the line of work that the location of employment changes frequently because of the short-term nature of work in the particular sector, daily travel from home to a temporary 2 location will only make the employee eligible to receive allowances for 'travel expenses proper' referred to in §7, §8 and §9 below, if the employee has no main or regular place of work. The employee shall, however, also be entitled to meal money (§14) if he has no opportunity to benefit from meal services arranged by his employer on the temporary location or in its immediate vicinity.

§ 4

Travel made otherwise than as referred to in section 3, paragraphs 1 and 2, by an employee to his secondary workplace, only makes the employee eligible to receive allowance for 'travel expenses proper' (see §7, §8 and §9), and to receive allowance for accommodation (see §16). Secondary workplace means such ordinary establishment of the employer, or another corporation within the same sphere of interests with the employer, which is situated in another area, or another state, than the employee’s primary, main or regular place of work.

Travelling to and from an employee’s separate accommodation and his secondary workplace does not entitle the employee to receive allowance for 'travel expenses proper' when the separate accommodation is necessary because of the location of the secondary workplace.

§ 5

The main or regular place of work is the employee’s permanent place of employment. If, owing to the itinerant nature of his work, the employee has no permanent place of employment, the main or regular place of work is considered the place where he receives his assignments and keeps the clothes, tools or materials that he uses in his work, or any other location with a similar function in respect of the performance of his duties.

§ 6

A day of travel means a period of no more than 24 hours beginning from the time that the employee sets out on a business trip from his workplace or home. A day of travel ends when the employee returns from a business trip to his workplace or home.

§ 7

Allowance for travel expenses proper to be paid for business travel means reimbursement for tickets for travel, seats or sleeping car berths and other comparable expenses directly related to travel.

Allowance for travel expenses proper also includes costs for the transport of tools and other such
equipment that the employee must take with him.

§ 8

The maximum allowance for travel expenses, payable for the business travel of the employee using
transport other than a motor vehicle owned or held by him is the amount spent on travel expenses proper, demonstrated with tickets provided by the transport company or other reliable proof.

§ 9

The maximum allowance for an employee’s business travel using a means of transport owned or held by him shall be:

Table of maximum allowance for an employee’s business travel
Vehicle (means of transport) Maximum allowance amounts per Km
Passenger car 44 cents, raised by:
  • 7 cents for towing a trailer.
  • 11 cents, if performance of the duties-at-hand requires towing a caravan attached to the car.
  • 22 cents, if performance of duties requires towing a mobile canteen or other comparable heavy load attached to the car.
  • 3 cents for transporting machinery or other items in the car; weighing over 80 kilograms, or of large size.
  • 3 cents, if performance of duties requires the employee to transport a dog in the car
  • 9 cents for actual kilometers driven on forest roads or road construction sites closed to other traffic if performance of duties so requires.
Motorboat, up to 50 hp 76 cents
Motorboat, more than 50 hp 111 cents
Snowmobile 106 cents
All-terrain quadbike 99 cents
Motorcycle 33 cents
Moped 18 cents
Other means of transport 10 cents.

If other persons, for whose transport the employer is responsible, travel in a vehicle owned or held by the employee, the maximum allowance referred to in paragraph 1 is raised by 3 cents per Km and passenger.

If an employee, enjoying the company car benefit known as the limited benefit (käyttöetu; förmån att använda bil), referred to in the official decision of the Tax Administration on benefits-in-kind, uses the company car for business travel and pays the fuel he is entitled to a kilometer allowance of no more than 10 cents per Km.

§ 10

Per diem, i.e. daily allowance means coverage for a reasonable increase in meal expenses and other living expenses incurred by the employee during business travel. Thus, per diem does not include allowance for travel expenses proper or accommodation expenses.

§ 11

Per diem is payable only for such a day when the temporary place of employment is located more than 15 Kms away from either the employee’s main or regular workplace or his home, depending on where the travel begins. Moreover, the temporary place of employment should be more than 5 Kms away both from the main or regular workplace and from home.

§ 12

Depending on the duration of a business trip, the maximum per diem amounts are the following

Table of maximum per diem amounts
Duration of trip Maximum per diem
More than 6 hours (partial amount) €20.00
More than 10 hours (full amount) €44.00
and, if travel time exceeds the last full day of travel:
- by at least 2 hours
€20.00

- by more than 6 hours

€44.00

For any day of travel, when the employee receives free meals, or meals included with the travel ticket, the maximum per diem is half the amount specified in paragraph 1. Free meals comprise two free meals in the case of full per diem, and one free meal in the case of partial per diem.

§ 13

The maximum per diems payable for business travel outside Finland are as follows:

Table of maximum per diems payable for business travel outside Finland
Country or region Maximum per diem €
Afghanistan   51.00
Albania    64.00
Algeria 62.00
Andorra 59.00
Angola 49.00
Antiqua and Barbuda 77.00
Argentina 34.00
Armenia 53.00
Aruba 57.00
Australia 68.00
Austria 67.00
Azerbaidzhan 52.00
Azores 61.00
Bahamas 75.00
Bahrain 74.00
Bangladesh 63.00
Barbados 70.00
Belarus 47.00
Belgium 67.00
Belize 45.00
Benin 43.00
Bermuda 74.00
Bhutan 42.00
Bolivia 41.00
Bosnia and Hercegovina 52.00
Botswana 40.00
Brazil 57.00
Brunei 39.00
Bulgaria 56.00
Burkina Faso 38.00
Burundi 42.00
Cambodia 58.00
Cameroon 53.00
Canada 67.00
Canary Islands 63.00
Cape Verde 43.00
Central African Republic 98.00
Chad 57.00
Chile 48.00
China 68.00
-Hong Kong 74.00
Colombia 48.00
Comoros 34.00
Congo (Congo-Brazzaville) 60.00
Congo, Democratic Republic of
(Congo-Kinshasa)
40.00
Cook Islands 63.00
Costa Rica 51.00
Côte d’Ivoire, Ivory Coast 72.00
Croatia 62.00
Cuba 63.00
Curaçao 48.00
Cyprus 62.00
Czech Republic 62.00
Denmark 70.00
Djibouti 68.00
Dominica 53.00
Dominican Republic 49.00
East Timor 46.00
Ecuador 55.00
Egypt 68.00
El Salvador 49.00
Eritrea 73.00
Estonia 58.00
Ethiopia 45.00
Faroe Islands 55.00
Fiji 51.00
France 70.00
Gabon 87.00
Gambia 40.00
Georgia 39.00
Germany 65.00
Ghana 49.00
Greece 60.00
Greenland 56.00
Grenada 63.00
Guadeloupe 50.00
Guatemala 62.00
Guinea 62.00
Guinea-Bissau 37.00
Guyana 42.00
Haiti 45.00
Honduras 46.00
Hungary 53.00
Iceland 68.00
India 52.00
Indonesia 48.00
Iran 62.00
Iraq 63.00
Ireland 68.00
Israel 81.00
Italy 66.00
Ivory Coast, Côte d’Ivoire 72.00
Jamaica 51.00
Japan 78.00
Jordania 79.00
Kazakhstan 42.00
Kenya 71.00
Korea, Democratic People's
Republic (North Korea)
63.00
Korea,
Republic of (South Korea)
80.00
Kosovo 50.00
Kuwait 70.00
Kyrgystan 40.00
Laos 46.00
Latvia 57.00
Lebanon 79.00
Lesotho 34.00
Liberia 44.00
Libya 60.00
Liechtenstein 67.00
Lithuania 54.00
Luxembourg 69.00
Macedonia 53.00
Madagascar 39.00
Madeira 60.00
Malawi 67.00
Malaysia 49.00
Maldives 60.00
Mali 41.00
Malta 66.00
Marshall Islands 55.00
Martinique 53.00
Mauritania 43.00
Mauritius 47.00
Mexico 50.00
Micronesia 49.00
Moldova 57.00
Monaco 98.00
Mongolia 38.00
Montenegro 59.00
Morocco 66.00
Mozambique 39.00
Myanmar (formerly Burma) 69.00
Namibia 34.00
Nepal 44.00
Netherlands 71.00
New Zealand 67.00
Nicaragua 41.00
Niger 48.00
Nigeria 74.00
Norway 66.00
Oman 66.00
Pakistan 31.00
Palau 76.00
Palestinian territory 72.00
Panama 55.00
Papua New Guinea 61.00
Paraguay 31.00
Peru 55.00
Philippines 65.00
Poland 56.00
Portugal 62.00
Puerto Rico 57.00
Qatar 68.00
Romania 58.00
Russian Federation 52.00
-Moscow 65.00
-St. Petersburg 60.00
Rwanda 33.00
Saint Kitts and Nevis 59.00
Saint Lucia 70.00
Saint Vincent and the Grenadines 70.00
Samoa 53.00
San Marino 60.00
Sao Tome and Principe 79.00
Saudi Arabia 66.00
Senegal 52.00
Serbia 62.00
Seychelles 69.00
Sierra Leone 53.00
Singapore 67.00
Slovakia 62.00
Slovenia 61.00
Solomon Islands 52.00
Somalia 65.00
South Africa 44.00
South Sudan 98.00
Spain 65.00
Sri Lanka 40.00
Sudan 21.00
Suriname 79.00
Swaziland 35.00
Sweden 61.00
Switzerland 79.00
Syria 95.00
Tadzhikistan 36.00
Taiwan 63.00
Tanzania 47.00
Thailand 64.00
Togo 52.00
Tonga 49.00
Trinidad and Tobago 70.00
Tunisia 52.00
Turkey 37.00
-Istanbul 39.00
Turkmenistan 76.00
Uganda 40.00
Ukraine 64.00
United Arab Emirates 74.00
United Kingdom 62.00
-London and Edinburgh 65.00
United States 70.00
-New York, Los Angeles, Washington 77.00
Uruguay 47.00
Uzbekistan 28.00
Vanuatu 58.00
Venezuela 63.00
Viet Nam 60.00
Virgin Islands (USA) 50.00
Yemen 89.00
Zimbabwe 46.00
Zambia 58.00
Any other country, not specified above 45.00

The per diem allowance concerns one day of travel i.e. 24 hours from the beginning of a business trip or 24 hours from the end of the preceding day of travel.

The maximum amount of per diem is defined on the basis of the country or region where the day of foreign travel ends. If the day of travel ends on a ship or airplane, the amount should be based on the country from where the ship or airplane last departed or, if leaving Finland, where it will first arrive.

Upon returning to Finland, the employee is entitled to half of the per diem for foreign travel paid for the last completed day of travel if the length of the business trip exceeds, by more than two hours, the last full day of travel that ended in foreign territory or in a ship or airplane departing from such territory.

If the length of a business trip exceeds, by more than ten hours, the last full day of travel, which ended in foreign territory or in a ship or airplane departing from such a territory, the employee is entitled to a per diem for foreign travel for the last full day of travel. The maximum amount payable for a day of travel or part thereof beginning after the employee returns to Finland must be determined as prescribed above in § 12.

For any business trip in foreign countries lasting a minimum of 10 hours, the employee is entitled to the confirmed amount for the relevant country. If the total duration of the trip is shorter than 10 hours the amount should be paid in accordance with the provisions and amounts applicable to domestic travel.

If the employee receives free meals or meals included in the price of a ticket or a hotel room the per diem must be reduced by 50 percent. For the purposes of calculation of per diems for foreign travel, two free meals constitute ‘free meals’.

If a business trip outside Finnish territory is made, the work being done under exceptional circumstances at the request of an employer located in Finland, and if the employee returns to Finnish territory for the night, and no per diem is being paid under § 12 above, the maximum allowance for business travel, by derogation from subparagraph 1 above is €18.00.

§ 14

Meal money can only be paid if no per diem is being paid, and the work assignment prevents the employee from having a meal at his normal eating-place during his meal break. The maximum amount is confirmed as €11.00.

If the employee has to have two meals at a place other than his normal eating-place during a business trip and no per diem is being paid the maximum meal money equals €22.00.

§ 15

The maximum allowance for accommodation payable over and above the per diem is the amount shown on a receipt or other reliable written proof provided by the accommodation establishment.

§ 16

The maximum allowance for accommodation payable, over and above the allowance for travel to the secondary workplace, is the amount shown on a receipt provided by the accommodation establishment, or a reasonable amount shown on other reliable written proof.

§ 17

An allowance for night travel is payable only if at least 4 hours (during a day of travel for which the employee is entitled to a per diem) are between the hours of 09:00 PM and 07:00 AM and if the employer does not arrange any free accommodation for the employee or pay him allowance for accommodation or for a sleeping car berth. The maximum allowance for night travel is €13.00.

§ 18

Seafarers: The foregoing provisions on allowances for travel expenses are applicable to the tax-exempt allowances under the law, payable to taxpayers earning seafarer’s income.

§ 19

This decision comes into force on January 1, 2021 and is applicable to business travel or part thereof taking place in 2021.