Light entrepreneurs expense reimbursements

Expense reimbursement covers costs that are directly caused by work. Expense reimbursements are not considered salary, so taxes or payroll-related fees do not need to be paid on them.

It is accepted in tax practices that an invoicing service company can also pay travel expense reimbursements tax-free for actual business trips to a special work location. This requires that the invoicing service company and the person performing the work have agreed that the work-related payment will be made as salary, and that the reimbursement is based on a proper travel claim.

Travel expenses include:

• Kilometer reimbursements
• Per diems
• Meal allowances

Invoicing service companies offer light entrepreneurs the possibility to invoice their clients without setting up their own company. Handling travel expense reimbursements in these situations can raise questions, especially from a taxation perspective. Here is a summarized overview of the Tax Administration's latest guidelines on travel expense reimbursements in advance withholding. The guidance was updated based on KVL 18/2024, under which tax-free treatment does not require the worker and client to have agreed on travel reimbursements as part of the assignment.

Travel claim details can be easily added to our system during invoice creation. Only mileage can be submitted for reimbursement, not any other car-related expenses, such as windshield washer fluid.

Links to tax administration guidelines

Tax Administration guidance: travel expense reimbursements paid by invoicing service companies (11.12.2024)

Specialized fields include, for example, construction, earthworks, and forestry. In these fields, work sites often change, and employees typically work at each site for a short period.

Per diem

According to tax authority guidelines, an employer can pay a tax-free per diem to a worker in a specialized field only when the employee stays overnight during a business trip. The employer may pay the per diem tax-free if all of the following conditions are met:

• The employee is a worker in a specialized field
• The employee has stayed overnight during the business trip in accommodation they rented or that was provided by the employer, and the stay in the same accommodation or nearby does not exceed the time limits specified in TVL Section 72 a.
• The employee has a primary residence (home) elsewhere
• The time and distance requirements set by the Tax administration's decision on expenses are met.
• The work assignment has not been interrupted due to vacation or weekends (per diem cannot be paid for the period when the assignment is interrupted).

Meal Allowances

A meal allowance received from the employer for a business trip is tax-free income. The tax-free status of the meal allowance does not have the same duration or distance requirements as the per diem. For specialized fields, the tax-free status of the meal allowance requires that the employee does not have access to employer-provided workplace dining at or near the special work location (TVL Section 71, Paragraph 2).

The employer cannot pay a meal allowance to the employee in addition to the per diems.

Links to tax administration guidelines

Travel expenses for workers in specialized fields (1.1.2025)

Mileage reimbursement for a business trip is a tax-free allowance if it is based on the worker's actual travel expenses and complies with the annual maximum limits set by the Tax Administration. The tax-free status requires that the mileage reimbursement relates to travel to a special work location and is properly documented with a travel claim.

The maximum mileage allowance is €0.55 per kilometer (in 2026).

In specialized fields, such as construction, the tax-free status of mileage reimbursement requires that the trips are not between the worker’s regular workplace and home. The trips must be related to mobile work or tasks directed to a special work location. The time and mileage limits outlined in the Tax Administration's decision on expenses are crucial in determining the tax-free status of the reimbursement.

Mileage reimbursements cannot be paid tax-free if a travel claim is not submitted, or if the invoicing service company cannot verify the authenticity of the trips and the basis for the reimbursement. In such cases, the reimbursement is treated as salary.

A Per diem is a tax-free reimbursement to the worker for increased living expenses incurred during a business trip. The tax-free status requires that the business trip is outside the worker's primary workplace and meets the time and distance requirements defined in the Tax Administration’s decision on expenses.

The tax-free status of a per diem requires the business trip to last over 6 hours (partial daily allowance) or 10 hours (full per diem). Additionally, the trip must be at least 15 kilometers away from the worker's primary workplace or home. The travel claim must include the start and end times of the trip and the trip's destination.

In 2026, the partial per diem (over 6 hours) is €25 and the full per diem is €54.

A per diem cannot be paid tax-free if the duration or distance of the trip does not meet the requirements set by the Tax Administration. In such cases, the per diem is treated as salary and reported to the income register alongside other salary payments. In specialized fields, such as forestry and construction, the tax-free status of per diems is determined partly by different criteria.

A meal allowance is a tax-free reimbursement when it is not possible to eat at a regular dining place and no per diem is paid for the same day. The allowance is meant to cover meal costs during working hours.

In a typical invoicing service situation, a meal allowance generally cannot be paid tax-free because the worker is not in an employment relationship with the client and does not have a meal break under working time legislation. For specialized fields, a tax-free meal allowance may be possible if no workplace dining is available at or near the special work location. The travel claim and supporting details must be retained for possible review.

As a light entrepreneur, you can receive tax-free travel reimbursements such as mileage reimbursements and per diems. Tax-free treatment requires that the payment is treated as salary, the trip meets the Tax Administration's conditions, and the travel claim details are sufficient. According to the Tax Administration guidance, tax-free treatment does not require travel reimbursements to have been agreed with the client as part of the assignment.

If the invoicing service pays the reimbursement as taxable income or does not reimburse the costs, you can usually claim actual travel costs as deductions in personal taxation. Costs reimbursed tax-free cannot be deducted again.

Purchases that may involve private use or have long-term utility are not accepted as reimbursable expenses. For example, clothing, a phone, or a computer cannot be claimed as reimbursable expenses by a light entrepreneur. However, these can be deducted as income-related expenses in personal taxation.

Meal and mileage reimbursements are always compensated based on their tax value and must be supported by a travel claim.

Many expenses that cannot be deducted through an invoicing service are deductible in personal taxation.

Links to tax administration guidelines

Meal and mileage reimbursements are always compensated based on their tax value and must be supported by a travel claim.

Calculating taxable income in personal taxation