Light entrepreneur’s travel allowances 2024 taxman – new instructions

According to Tax Administration’s new guidelines that came into effect at the beginning of the year, invoicing service must be able to ensure that light entrepreneurs and their clients have mutually agreed on compensating tax-free travel costs, whether they are part of the invoiced total fee or on top of the total fee.

If, for example, kilometre allowances are included in the invoicing price as part of the total fee, it is good to make it clear to clients that this does not mean additional fees or costs, but that part of the invoiced fee is used to compensate for the light entrepreneur’s tax-free travel costs incurred by performing the work. Clients will not have any additional obligations.

In a nutshell; it works exactly the same as before, but now the invoicing service must be able to verify that compensating tax-free travel costs has been agreed between the client and light entrepreneur.

Link to Tax Administration’s new guidelines (in Finnish) regarding tax-free travel expenses paid by invoicing services:

Measures required by the new guidelines

Primarily, we strive to fulfill our obligations without causing any inconvenience to our light entrepreneurs or to their clients, but the implementation of Tax Administration’s new guidelines in practice may sometimes cause small delays in processing invoicing orders and salaries, which include tax-free travel expense compensations. For the time being, agreements on these compensations will be verified by notification on invoices that light entrepreneurs send, which, when paid, act as a confirmation of the agreement required for paying tax-free travel costs. The following note will be added to invoices that have travel costs assigned to them:

“By paying the invoice, client confirms that the payment of compensation for tax-free travel costs is part of the agreement between the client and person performing the work.”

Light entrepreneur and client can also enter into and deliver to us a separate agreement on the payment of tax-free travel expenses on their own initiative. The completed contract template:

Agreement on reimbursement of tax-free travel expenses (docx)

Agreement on reimbursement of tax-free travel expenses (pdf)

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