Travel costs are in principle deductible insofar as they have been incurred in the interest of business.
We will see the specific rules that exist however for certain categories of trips.
I- Travel expenses
The deductibility of these trips meets certain limits. Thus, when the manager cannot demonstrate the interest of this charge for the company, the costs are reintegrated into the tax benefit by the administration.
Number of court decisions demonstrate these facts. As an example, we can cite the refusal to deduct travel expenses incurred by the wives of members of a company participating in a professional congress.
In return, the travel expenses of managers accompanying their clients to whom the company had offered trips, were allowed as a deduction.
Now let’s look at two special cases :
These expenses are fully deductible when the trips are organized for an obvious commercial promotion purpose.
The commercial interest is obvious when the trips are offered to the most successful resellers of the company, provided of course that the company can indicate the identity and the functions of the beneficiaries of these trips.
The deduction of these costs also has limits, particularly when a professional trip is extended over a tourist stay. In this case, the costs caused by this extension of stay are not deductible.
Travel costs of external accompanying persons
When their quality is demonstrated, the travel expenses of these people is deductible. The deductibility is allowed for example in the case of a trip organized by a manufacturer for the benefit of its best distributors when the beneficiary of the trip confirms on a bulletin his registration as well as that of an accompanying person.
However, it should be noted that, in principle, the costs of spouses of employees who are beneficiaries of an incentive trip cannot be deducted when interest in the business has not been demonstrated.
Some details regarding travel costs should be added :
- When a manager accompanies the winners of a business competition, the cost of his trip can be considered as a taxable benefit in kind for the manager ;
- Stimulation trips cannot be considered gifts. They must therefore not appear on the overhead statement “RELEVE DE FRAIS GENERAUX” (N ° 2067 form, attached annually to the tax report).
II- Transportation costs reimbursed to employees and officers
When a company pays sums to its directors or employees to compensate them for the use of their personal vehicle, the deductible part of these indemnities is limited to the amount deductible from the depreciation of the vehicle.
The kilometric scale established by the tax authorities takes this scaling into account, so it is preferable to use it to calculate the compensations.
The amount of travel and transportation expenses reimbursed to the highest paid managers or employees must be indicated on the statement of general expenses (N°2067 form).
In certain cases, vehicles owned or leased by employees may be subject to the tax on company vehicles when the company reimburses a significant amount of costs. You can consult our article entitled “Vehicle tax on companies” about this topic.
As regards the managers of companies, the professional nature of journeys made with their own vehicle must be justified. It is not enough to indicate only the date, the place of travel and the number of kilometers traveled.
III- Travel and meal expenses involved by business operators subject to the B.I.C. tax regime
- From home to work
Operators’ expenses for transportation from home to work and back are in principle deductible.
However, it should be noted that these expenses cannot be deducted when the operator’s domicile is abnormally far from the workplace unless the distance does not depend on his will. The administration considers that a distance from the home to the workplace can be considered normal up to 40 kilometers.
In the event of distance from the domicile beyond this distance, the deduction of costs must be limited to the first 40 km unless the operator demonstrates the inevitability.
- Fuel costs for mixed-use vehicles
Individual companies which have opted for keeping “super-simplified” accounts can deduct fixed fuel costs for their business trips. The scale published by the administration is only applicable to cars and two-wheelers for mixed use.
Consequently, it cannot be applied to vehicles used for strictly professional use such as trucks, utility vehicles, scooters for delivery use, etc.
We can also add that carpooling has been arranged by the administration. Thus, the products from carpooling are exempt from income tax, on the other hand, travel costs in carpooling can only be deducted for the net amount of reimbursements received from other carpoolers.
Meals at the workplace
When a professional carries out an activity liable to the BIC tax regime, he can deduct the costs of meals taken outside the home when it is away from the workplace.
The deductible amount per meal is however limited by two limits :
- The share of expenditure corresponding to the cost that the operator would have had if he had eaten at home must be excluded. This amount could be adjusted at a flat rate to € 4.85 for the year 2019.
- The total amount of meals must also not exceed a limit set at € 18.80 for the year 2019. Beyond this amount the charge is not deductible.
In addition, the operator must be able to present documents justifying his expenses to the administration even if he opts for a standard deduction from the cost of meals.
In conclusion, we can add that all other transport costs of a professional nature are deductible such as transport on purchases or transport on sales.
An exception exists, however : the cost of transport on fixed assets cannot be deducted directly as expenses but integrated into the cost price of the fixed asset and thus deducted by means of depreciation.
Do you still have doubts on this subject? Do not hesitate to contact us!
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