Tax-exempt allowances in 2016 for business travel

Date of issue
12/1/2015
Record no.
A175/200/2015
Validity
1/1/2016−

Decision of the Tax Administration on tax-exempt allowances for travel expenses in 2016

— English translation —

Under § 73 and § 75.2 of Income Tax Act (TVL) 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 2016 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 § 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 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:

Vehicle (means of transport) Maximum allowance amounts per Km
Passenger car 43 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 74 cents
Motorboat, more than 50 hp 108 cents
Snowmobile 102 cents
All-terrain quadbike 96 cents
Motorcycle 32 cents
Moped 17 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 11 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) €19.00
More than 10 hours (full amount) €40.00
and, if travel time exceeds the last full day of travel:  
- by at least 2 hours €19.00
- by more than 6 hours €40.00

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:

Country or region

Maximun per diem €

Afghanistan

55.00

Albania

52.00

Algeria

64.00

Andorra

58.00

Angola

95.00

Antiqua and Barbuda

74.00

Argentina

47.00

Armenia

52.00

Aruba

54.00

Australia

63.00

Austria

62.00

Azerbaidzhan

65.00

Azores

59.00

Bahamas

75.00

Bahrain

71.00

Bangladesh

55.00

Barbados

65.00

Belarus

43.00

Belgium

61.00

Belize

47.00

Benin

43.00

Bermuda

74.00

Bhutan

41.00

Bolivia

38.00

Bosnia and Hercegovina

50.00

Botswana

40.00

Brazil

55.00

Brunei

40.00

Bulgaria

51.00

Burkina Faso

38.00

Burundi

47.00

Cambodia

53.00

Cameroon

49.00

Canada

64.00

Canary Islands

60.00

Cape Verde

42.00

Central African Republic

53.00

Chad

53.00

Chile

49.00

China

68.00

-Hong Kong

70.00

-Macao

66.00

Colombia

50.00

Comoros

43.00

Congo (Congo-Brazzaville)

51.00

Congo, Democratic Republic of
(Congo-Kinshasa)

70.00

Cook Islands

62.00

Costa Rica

55.00

Côte d’Ivoire, Ivory Coast

71.00

Croatia

60.00

Cuba

58.00

Curaçao

49.00

Cyprus

60.00

Czech Republic

55.00

Denmark

68.00

Djibouti

64.00

Dominica

54.00

Dominican Republic

59.00

East Timor

45.00

Ecuador

57.00

Egypt

57.00

El Salvador

49.00

Eritrea

53.00

Estonia

51.00

Ethiopia

49.00

Faroe Islands

53.00

Fiji

44.00

France

66.00

Gabon

74.00

Gambia

40.00

Georgia

45.00

Germany

61.00

Ghana

44.00

Greece

59.00

Greenland

54.00

Grenada

63.00

Guadeloupe

50.00

Guatemala

54.00

Guinea

59.00

Guinea-Bissau

35.00

Guyana

42.00

Haiti

51.00

Honduras

45.00

Hungary

54.00

Iceland

68.00

India

47.00

Indonesia

44.00

Iran

49.00

Iraq

65.00

Ireland

66.00

Israel

74.00

Italy

64.00

Ivory Coast, Côte d’Ivoire

71.00

Jamaica

54.00

Japan

71.00

Jordania

74.00

Kazakhstan

52.00

Kenya

58.00

Korea, Democratic People's
Republic (North Korea)

66.00

Korea,
Republic of (South Korea)

79.00

Kosovo

45.00

Kuwait

68.00

Kyrgystan

45.00

Laos

50.00

Latvia

50.00

Lebanon

69.00

Lesotho

34.00

Liberia

56.00

Libya

63.00

Liechtenstein

70.00

Lithuania

48.00

Luxembourg

64.00

Macedonia

51.00

Madagascar

36.00

Madeira

58.00

Malawi

50.00

Malaysia

47.00

Maldives

62.00

Mali

41.00

Malta

62.00

Marshall Islands

61.00

Martinique

52.00

Mauritania

52.00

Mauritius

51.00

Mexico

54.00

Micronesia

55.00

Moldova

40.00

Monaco

68.00

Mongolia

46.00

Montenegro

52.00

Morocco

63.00

Mozambique

44.00

Myanmar (formerly Burma)

51.00

Namibia

34.00

Nepal

40.00

Netherlands

65.00

New Zealand

60.00

Nicaragua

45.00

Niger

44.00

Nigeria

79.00

Norway

68.00

Oman

66.00

Pakistan

39.00

Palau

64.00

Palestinian territory

66.00

Panama

56.00

Papua New Guinea

60.00

Paraguay

34.00

Peru

58.00

Philippines

59.00

Poland

56.00

Portugal

60.00

Puerto Rico

57.00

Qatar

70.00

Romania

54.00

Russian Federation

50.00

-Moscow

62.00

-St. Petersburg

57.00

Rwanda

42.00

Saint Kitts and Nevis

65.00

Saint Lucia

74.00

Saint Vincent and the Grenadines

70.00

Samoa

49.00

San Marino

57.00

Sao Tome and Principe

61.00

Saudi Arabia

68.00

Senegal

48.00

Serbia

55.00

Seychelles

70.00

Sierra Leone

58.00

Singapore

67.00

Slovakia

57.00

Slovenia

57.00

Solomon Islands

50.00

Somalia

56.00

South Africa

45.00

South Sudan

54.00

Spain

62.00

Sri Lanka

47.00

Sudan

61.00

Suriname

54.00

Swaziland

35.00

Sweden

63.00

Switzerland

76.00

Syria

63.00

Tadzhikistan

47.00

Taiwan

60.00

Tanzania

43.00

Thailand

56.00

Togo

48.00

Tonga

44.00

Trinidad and Tobago

71.00

Tunisia

57.00

Turkey

52.00

-Istanbul

54.00

Turkmenistan

60.00

Uganda

35.00

Ukraine

53.00

United Arab Emirates

71.00

United Kingdom

70.00

-London and Edinburgh

74.00

United States

67.00

-New York, Los Angeles, Washington

73.00

Uruguay

50.00

Uzbekistan

53.00

Vanuatu

55.00

Venezuela

90.00

Viet Nam

55.00

Virgin Islands (USA)

48.00

Yemen

65.00

Zimbabwe

49.00

Zambia

59.00

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 €10.00. 

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 €20.00.

§ 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 €12.00.

§ 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, 2016 and is applicable to business travel or part thereof taking place in 2016.

Further explanation of the list of foreign territories where per diem allowances are paid (pdf)