Travel allowances in a Toiminimi

[csaavedra]

Hello!

I have a toiminimi and I'm currently working for a Spanish customer, for which I had to do a trip last month to Spain for a few days. They've paid my flight/hotel themselves, but I incurred in some minor expenses (like taxi and bus rides) that they are reimbursing me now. Also, they will be paying me extra 30 € / day for the time I spent there for the money I spent in meals. They ask me to put all of this in this month's invoice, but I think that if I do that these will become taxable income, which makes no sense, given that usually allowances are tax exempt.

Any ideas on what to do about this?

[Upphew]

given that usually allowances are tax exempt.

For employees. Toiminimi is a company. All income is taxable income. Sure the taxable income is lower when you pay the travel allowances to your employee...

[Rosamunda]

Hello!

I have a toiminimi and I'm currently working for a Spanish customer, for which I had to do a trip last month to Spain for a few days. They've paid my flight/hotel themselves, but I incurred in some minor expenses (like taxi and bus rides) that they are reimbursing me now. Also, they will be paying me extra 30 € / day for the time I spent there for the money I spent in meals. They ask me to put all of this in this month's invoice, but I think that if I do that these will become taxable income, which makes no sense, given that usually allowances are tax exempt.

Any ideas on what to do about this?

Let's say you incurred 300e in expenses for travel : taxi, bus
Let's say you incurred 100e in expenses for food

Presumably you have receipts for all these expenses.

Now, you are going to invoice your customer.

Let's say you invoice 300e for your travel and 5 x 30e for your per diem (food). That's 450e

Your revenue from this is 450e.
Your deductible expenses total 400e.

You will be taxed on the NET RESULT of the business activity. So your taxable income in this example is 50e. This is fair since you made 50e profit out of it (ie the difference between what you really spent on travel and food and what you invoiced to your customer).


Maybe someone will correct if I am wrong but my understanding is that you are taxed on the NET RESULT of your toiminimi business, not on the GROSS REVENUE.

[csaavedra]

Thanks guys! So basically, this mean that I should keep the receipts myself? Customer was asking for them in order to pay the allowances.

[Upphew]

Thanks guys! So basically, this mean that I should keep the receipts myself? Customer was asking for them in order to pay the allowances.

In Finland you would keep the receipts yourself and send an invoice which would be "the receipt" for them. They would only need the receipts if they paid salary and wanted to pay the travel and meal allowances without taxes... just like you are trying to do here, but it only works b2c, not b2b. You were acting as business there if you are billing them. You were as "consumer" or employee if they pay a salary for you.

[csaavedra]

Thank you, that makes a lot of sense. So I'll keep the receipts and deduct them later as business expenses, they have enough with my detailed invoice.