Tax-exempt allowances in 2012 for business travel

Date of issue
12/7/2011
Record no.
816/32/2011
Validity
In force until further notice

Decision of the Finnish Tax Administration on tax-exempt allowances for travel expenses in 2012

Under § 73 and § 75.2 of Income Tax Act (TVL) of 30 Dec 1992 (1535/1992), including the amendments by Act no 504/2010, 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 2012 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 trip means any short-term trip 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 § 72a, Income Tax Act (TVL)
  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, which is 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 business travel by the employee using
transport, other, than a motor vehicle owned or held by him, is the amount spent on travel expenses proper, demonstrated with receipts 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:

Vehicle (means of transport) Maximum allowance amounts per Km
Passenger car 45 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.
- 21 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 78 cents
Motorboat, more than 50 hp 114 cents
Snowmobile 108 cents
All-terrain quadbike 102 cents
Motorcycle 34 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 this car for business travel and pays the fuel costs involved, he is entitled to a kilometer allowance of no more than 12 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

Duration of trip Maximum per diem
More than 6 hours (partial amount) €16.00
More than 10 hours (full amount) €36.00
and, if travel time exceeds the last full day of travel:
- by at least 2 hours
€16.00
- by more than 6 hours €36.00

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 shall be as follows:

Country or region Maximun per diem €
Afghanistan   58.00
Albania    50.00
Algeria 69.00
Andorra 58.00
Angola 87.00
Antiqua and Barbuda 74.00
Argentina 52.00
Armenia 48.00
Aruba 49.00
Australia 66.00
Austria 62.00
Azerbaidzhan 68.00
Azores 59.00
Bahamas 68.00
Bahrain 68.00
Bangladesh 44.00
Barbados 60.00
Belarus 50.00
Belgium 61.00
Belize 40.00
Benin 44.00
Bermuda 67.00
Bhutan 34.00
Bolivia 29.00
Bosnia-Hercegovina 48.00
Botswana 40.00
Brazil 68.00
Brunei 40.00
Bulgaria 49.00
Burkina Faso 36.00
Burundi 36.00
Cambodia 50.00
Cameroon 46.00
Canada 69.00
Canary Islands 60.00
Cape Verde 42.00
Central African Republic 39.00
Chad 46.00
Chile 58.00
China 63.00
Hong Kong 70.00
Macao 63.00
Colombia 58.00
Comoros 44.00
Congo 47.00
Congo, Democratic Republic of
(formerly Zaire)
68.00
Cook Islands 64.00
Costa Rica 50.00
Côte d’Ivoire, Ivory Coast 71.00
Croatia 59.00
Cuba 50.00
Cyprus 61.00
Czech Republic 59.00
Denmark 69.00
Djibouti 48.00
Dominica 49.00
Dominican Republic 53.00
East Timor 46.00
Ecuador 48.00
Egypt 54.00
El Salvador 47.00
Eritrea 30.00
Estonia 50.00
Ethiopia 36.00
Faroe Islands 53.00
Fiji 43.00
France 66.00
Gabon 73.00
Gambia 36.00
Georgia 50.00
Germany, including Berlin 61.00
Ghana 47.00
Greece 62.00
Greenland 53.00
Grenada 58.00
Guadeloupe 50.00
Guatemala 43.00
Guinea 46.00
Guinea-Bissau 35.00
Guyana 37.00
Haiti 48.00
Honduras 41.00
Hungary 56.00
Iceland 63.00
India 45.00
Indonesia 49.00
Iran 50.00
Iraq 58.00
Ireland 64.00
Israel 65.00
Italy 65.00
Milan 65.00
Ivory Coast, Côte d’Ivoire 71.00
Jamaica 52.00
Japan 83.00
Jordania 69.00
Kazakhstan 63.00
Kenya 50.00
Korea, Democratic People's
Republic (North Korea)

66.00

Korea,
Republic of (South Korea)
78.00
Kosovo 44.00
Kuwait 64.00
Kyrgystan 47.00
Laos 40.00
Latvia 51.00
Lebanon 68.00
Lesotho 35.00
Liberia 45.00
Libya 53.00
Liechtenstein 72.00
Lithuania 48.00
Luxembourg 63.00
Macedonia 51.00
Madagascar 40.00
Madeira 58.00
Malawi 52.00
Malaysia 55.00
Maldives 52.00
Mali 41.00
Malta 59.00
Marshall Islands 39.00
Martinique 51.00
Mauritania 49.00
Mauritius 49.00
Mexico 56.00
Micronesia 44.00
Moldova 46.00
Monaco 67.00
Mongolia 49.00
Montenegro 52.00
Morocco 62.00
Mozambique 48.00
Myanmar (formerly Burma) 55.00
Namibia 40.00
Nepal 37.00
Netherland Antilles 42.00
Netherlands 63.00
New Zealand 61.00
Nicaragua 41.00
Niger 43.00
Nigeria 68.00
Norway 70.00
Oman 58.00
Pakistan 35.00
Palau 41.00
Palestine 56.00
Panama 46.00
Papua New Guinea 45.00
Paraguay 31.00
Peru 55.00
Philippines 51.00
Poland 57.00
Portugal 60.00
Puerto Rico 40.00
Qatar 62.00
Romania 54.00
Russian Federation 56.00
Moscow 71.00
St. Petersburg 65.00
Rwanda 39.00
Saint Kitts and Nevis 61.00
Saint Lucia 76.00
Saint Vincent and the Grenadines 72.00
Samoa 43.00
San Marino 55.00
Sao Tome and Principe 49.00
Saudi Arabia 60.00
Senegal 42.00
Serbia 53.00
Seychelles 69.00
Sierra Leone 41.00
Singapore 70.00
Slovakia 59.00
Slovenia 59.00
Solomon Islands 35.00
Somalia 40.00
South Africa 52.00
South Sudan 52.00
Spain 63.00
Sri Lanka 39.00
Sudan 52.00
Surinam 36.00
Swaziland 40.00
Sweden 68.00
Switzerland 75.00
Syria 58.00
Tadzhikistan 47.00
Taiwan 56.00
Tanzania 40.00
Thailand 56.00
Togo 47.00
Tonga 38.00
Trinidad and Tobago 68.00
Tunisia 57.00
Turkey 58.00
-Istanbul 60.00
Turkmenistan 59.00
Uganda 35.00
Ukraine 59.00
United Arab Emirates 68.00
United Kingdom 68.00
London and Edinburgh 74.00
United States 64.00
New York, Los Angeles, Washington 71.00
Uruguay 50.00
Uzbekistan 50.00
Vanuatu 40.00
Venezuela 58.00
Vietnam 52.00
Virgin Islands (USA) 41.00
Yemen 47.00
Zimbabwe 44.00
Zambia 50.00
Any other country, not specified above 41.00

The per diem allowance concerns one day of travel. A day of travel is 24 hours from the beginning of abusiness trip, or 24 hours of 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/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, which ended in foreign territory or in a ship or airplane departing from such a 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 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, should 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 should be reduced by 50 per cent. 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 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 paragraph 1 above, is €18.00.

§ 14

Meal money can only be paid if no per diem is being paid, and the assignment prevents the employee from having a meal at his normal eating-place during his meal break. The maximum meal money amount is confirmed as €9.00. 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 €18.00.

§ 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 €12.0

§ 18

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

§ 19

This decision comes into force on January 1, 2012, and is applicable to business travel or part thereof taking place in 2012.

Helsinki, December 7, 2011.