Income tax exempt allowances: the keys to knowing your obligations

Travel expenses: tax-exempt allowances

If you have to travel daily for your job and it's part of your routine to leave the factory, workshop, or your place of work, you should know that, the amounts you receive from your employer to compensate you for the expenses generated by these transfers are most likely to be per diems exempt from personal income tax.

Although these travel expenses are not exempt from tax in all cases, some circumstances may apply that exempt from tax obligations for their holders. In particular, this is what happens when:

• It is about justifiable expenses by means of a ticket, invoice or equivalent document, issued by a public transport company.
• although public transport was not used, but The travel expense claim submitted does not exceed €0.19 per kilometre travelled.taking into account the sum of the costs related to the travel itself, and adding those associated with tolls and parking, if any.

Tax-exempt maintenance and accommodation expenses 2017

The exemption from the levy in this case has a temporal component to be taken into account. It is the one that determines the 9-month deadline. If the stay is longer than this period, the amounts allocated by the company to compensate for accommodation and subsistence expenses diets exempt from Personal Income Tax will not be considered in 2017 and will be subject to taxation from the first day.

Where the stay does not exceed nine months, the worker receiving it will not be obliged to pay tax on this concept.

In this respect, it should be borne in mind that, within that time limit:

• Time taken off for holidays, or for an employee's absence from their post due to illness, shall not be deducted, nor shall any other circumstances that arise and do not involve an alteration of the role be deducted.
• When paying tax on this item, “The payer shall provide proof of the day and place of travel, as well as its reason or purpose.”.

To be able to meet the corresponding tax obligations in cases where the situation does not allow for discussion per diems exempt from personal income tax, it is necessary to to understand what is considered “normal maintenance and living costs”. For the law, it is considered the equivalent to, as a maximum of 53.34 euros per day within national territory or 91.35 euros per day in foreign territory if overnight stays are included. And in cases where only maintenance is mentioned, the maximum is set at 26.67 euros per day within our borders and 48.08 euros per day abroad.

The Tax Agency establishes certain exceptions to allowances exempt from personal income tax. mentioned. They are the ones collected in the section “special rules”and which apply to:

•  Airline flight crew
• Staff posted abroad
• Mobile or travelling workplaces
• Employment relationships of a special dependent nature
• Relocation of the workstation
•  Members of the jury
• Members of polling stations
• Members of representative institutions

It is the employer who is obliged to justify exempt per diems for income tax purposes.

Although until not long ago it was the employees of each organisation who had to preserve the means of proof, today, The justification for tax-exempt diets rests with their employer.

While it may be required by the company that each worker collect tickets, keep receipts and not lose vouchers, in the event of a tax inspection initiated by the Administration, it will be the business owner who must respond. It is their responsibility to prove:

1. That there are documents justifying these per diems exempt from personal income tax.
2. That those documents are complete and include the minimum data required by law (such as the date, amount, and place of issue).
3. That the amount of the allowance is exempt from tax payment and therefore complies with the applicable legal precepts.

The Personal Income Tax Regulations (Royal Decree 439/2007), in its Article 9, is what recognises the employer as a subject of tax verification. Although the employer already had responsibility for everything relating to the administration or procedures relating to allowances exempt from income tax, the difference now is that, if there were a management error and, as a result, the accounts shared with the Tax Agency were flawed, you will have to answer.

For example, if no documentary proof of a payment can be found or if the amounts declared do not add up.

It is important to note that the requirement to retain vouchers does not extend to the employee, therefore, Each company should find a way to optimise the management of these types of documents.

If we consider the number of hands each ticket or invoice passes through until it is properly processed and recorded, it's easy to guess that the propensity for human error is high.

To avoid tax problems, the management of these budgetary items must be handled with extreme care, and one way to do this, simplifying accounting in the company, is to resort to solutions such as Ticket Restaurant.

This card, which can be linked to an account holder and on which a limit can be set, automates data collection, and can only be used during working hours and for the purpose approved by the company.

It is a resource that contributes to the verification of tax-exempt diets on behalf of the company and which provides comfort to your staff's day-to-day.