Foreign business trip by private car

We will not find regulations regarding the settlement of business travel expenses in one legal act. The necessity to search statutes, codes and ordinances causes that, in theory, a case that is easy to settle raises a big problem. In order to show the specificity of the topic in detail, the following example will be considered:

The employee made a business trip, during which he was driving a private car (2.0 dCi). The route of the journey: Wrocław - Vienna - Wrocław, 1100 km.

Whenever topics such as:

• employee income tax exemption, the source of the regulation is the Personal Income Tax Act (updof),

• diet rates and reimbursement of travel costs during a business trip, the source of regulations is the Regulation of the Ministry of Labor and Social Policy of 29 January 2013 on receivables due to an employee employed in a state or local government budgetary unit for a business trip (Journal of Laws of 2013, No. 0, item 167, henceforth the Reg. on business trips),

• rates of settlement of costs related to the use of a car not belonging to the employer, the source of the regulation is the Regulation of the Minister of Infrastructure on the conditions for determining and reimbursing the costs of using passenger cars, motorcycles and mopeds not owned by the employer for business purposes of March 25, 2002 (Journal of Laws No. 2002 No. 27, item 271, henceforth Regulation on private means of transport).

Business trip in your own car

To travel on a business trip in your own car, you must enter into a business use agreement with your employer. Nothing else prevents the use of a private car, motorcycle or moped for business purposes, as mentioned in the regulation on private means of transport. Of course, the vehicle must be roadworthy, i.e. have an up-to-date technical inspection and liability insurance.

Reimbursement of expenses incurred by the employee - rates of 1 km of the vehicle mileage

Unless otherwise stipulated in the employment contract, remuneration regulations or collective labor deed, the provisions of the ordinance on business trips shall apply to the settlement of the employee's travel costs using a vehicle not belonging to the employer. The act specifies the rates for 1 kilometer of the vehicle's mileage, depending on the engine capacity. In the context of the example given, an employee is entitled to PLN 0.8358 for 1 km (in 2013). Neither the current price for 1 liter of fuel nor fuel consumption reports matter here - the same rate is applied in PLN for each passenger car with engine capacity greater than 900 cm3.

Following the example given at the beginning - using the above rate, the employer returns the employee an amount equal to PLN 919.38, which, according to the updof, is completely exempt from income tax.

Of course, the employer may include the higher rates he has established in one of the employment relationship documents. However, rates higher than the statutory rates result in the obligation to tax with income tax, which is subject to the difference between the rate set by the employer and the rate specified in the regulation.

The employee made a business trip, during which he was driving a private car (2.0 dCi). The route of the journey: Wrocław - Vienna - Wrocław, 1100 km. In the employment contract, as the basis for reimbursement of costs, the rate for 1 kilometer of mileage of the above-mentioned vehicle was 1 PLN

According to the above example, the employer reimburses the employee PLN 1100, of which PLN 180.62 is the employee's income subject to income tax.

Employee reimbursement - terms established by the employer

The employer may also establish a different method of settling the costs of business travel by the employee's private car - he may resign from the lump sum nature of the expenses and reimburse them on the basis of a proof of incurrence, e.g. on the basis of a VAT invoice for fuel and simultaneously conducted mileage. It is important that, regardless of the method of settling accounts with the employee, the refund does not exceed the value of the rates specified in the regulation on private means of transport. It was shown earlier that the maximum amount of the refund (exempt from income tax) is PLN 919.38. Should the travel costs exceed this threshold, the excess would result in the obligation to pay income tax.

The employee made a business trip, during which he was driving a private car (2.0 dCi). The route of the journey: Wrocław - Vienna - Wrocław, 1100 km. Diesel fuel consumption was approx. 7l / 100km, invoices for fuel purchased in Poland delivered for the amount of PLN 400 gross.

In this case, the reimbursement of the expenditure is exempt from taxation with personal income tax (it does not exceed the threshold resulting from the rate per 1 km specified in the regulation).

Reimbursement of expenses for parking spaces, toll road section

It is the employer's responsibility to cover other necessary documented expenses, determined or recognized by the employer in accordance with justified needs. An employee showing proof of payment for parking in the car park, entrances to conference facilities, etc. must be reimbursed, provided that the stop in the car park was at the place and time justified by the performed employee duties.