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Tax-free travel allowance in transport companies

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Employees travelling for work may be paid a tax-free travel allowance by their employer to cover any travel expenses. This also applies to lorry drivers in transport companies. 

This allowance is also known as ‘subsistence allowance’ and may be paid in accordance with the standard rates that apply. The allowance is meant to cover expenses for food, petty acquisitions and accommodation when you are travelling. However, drivers transporting goods or individuals are not entitled to have their accommodation expenses covered according to the standard rates.

There are certain requirements that need to be met in order to be paid the tax-free travel allowance. It is therefore important to make sure that your travel documents are in order.

Below, you can see what you need to be aware of as an employee or an employer. 

As an employee: Things to remember

In case of incorrect travel documentation, you may have to pay tax on the allowance. It is therefore important to register your travel expenses correctly and keep the necessary documentation to allow your employer to calculate your allowance correctly and check that the requirements have been met.

  1. You have to be away for at least 24 hours.
  2. You must have a temporary workplace. As an example, being a mobile workplace, a lorry driver’s lorry is usually considered a temporary workplace.
  3. It is not possible for you to spend the night in your own home. This may be due to the distance between your usual place of residence and your temporary workplace, or because your employer has ordered you not to leave something unsupervised and this prevents you from leaving your temporary workplace.
  4. Your work travel must have a business purpose – from start to finish. 

It is impossible to briefly describe the requirements in full as they may depend on several factors and the specific situation. You and your employer should therefore look into it in more detail. Please read more and see some examples here

Register these details during or shortly after worktravel:

  1. Your name, address and civil registration no. (CPR no.) or employee no.
  2. The date and exact time when you started and finished travelling. Travel is usually considered to start when you leave your employer’s address.
  3. The travel end destination and any other destinations underway (addresses or other indications of exact location).
  4. A description of the business purpose of the travel. Be specific, such as ‘Delivery of goods’. 

You are welcome to use our form so you do not forget to include all the information. See the form below. 

Give the information (the forms, if used) along with your travel documents to your employer or distribution supervisor who will be checking them or calculating the allowance.

 

As an employer: Things to remember

As an employer, it is your responsibility to check and approve that the requirements have been met and that the travel documentation contains the necessary information. In case of incorrect travel documentation, your employees may have to pay tax on the allowance.  

The travels of your employees must meet these 4 guiding requirements:

  1. They have to be away for at least 24 hours.
  2. The employee cannot stay overnight in his own home. This may be due to the distance between the usual place of residence and the temporary workplace, or because the employee has been ordered not to leave something unsupervised, which prevents them from leaving their temporary workplace.
  3. The work travel must have a business purpose – from start to finish.
  4. They have to have a temporary workplace. As an example, being a mobile workplace, a lorry driver’s lorry is usually considered a temporary workplace.

It is impossible to briefly describe the requirements in full as they may depend on several factors and the specific situation. You and your employee should therefore look into it in more detail. Please read more and see some examples here

 Check that the travel documentation includes all the necessary information about your employees’ work travel:

  1. Name, address and civil registration no. (CPR no.) or employee no.
  2. The date and exact time when the travelling started and finished. Travel is usually considered to start when the employee leaves the employer’s address.
  3. The end destination of the travel and any other destinations underway (addresses or other indications of exact location).
  4. Be specific about the business purpose of the travel, such as ‘Delivery of goods’.

You are welcome to use our form so you and your employee do not forget to include all the information. See the form below. 

Calculate the travel allowance according to the standard rates of the Danish Tax Assessment Act (Ligningsloven). The rates are announced by the Danish Tax Agency each year in December and are available (in Danish) at www.skat.dk/satser. You will find them below as well. 

You can report the travel allowance to the Danish Tax Agency through our online E-income system or through your payroll bureau. You should report them on a monthly basis, for instance when reporting your employees’ pay. 

For information about using the E-income system, read here (in Danish).

Standard rates for food and accommodation 2019

Food allowance for tourist drivers (per day when driving in DK/other countries, respectively)

DKK 75/DKK 150

Food allowance for other salary/wage earners (per day)

DKK 509

Petty acquisitions (in case the maximum food allowance is not paid out, this rate may be allowed to cover petty acquisitions)

25%

Accommodation allowance (overnight stay)* (per day)

DKK 219

Reduction for free meals: breakfast, lunch and dinner, respectively

15%/ 30%/ 30%

* Drivers transporting goods or individuals are not entitled to have their accommodation expenses covered according to the standard rates.
See more rates (in Danish) at www.skat.dk/satser.

Avoid the most frequently occurring errors in transport companies

  • Lack of information in the travel registration. Maybe it has an incomplete address or no description of the specific purpose of the travel.

  • Incorrect rates were used for the calculation. Remember to use the correct rates of the year.

  • The distance criteria has not been met. It may be, that the distance between the home and the temporary workplace is considered too short to necessitate an overnight stay away from home.

  • In some cases, the rules on driving hours and rest hours do not harmonise with the rules on tax-free travel allowance. If you have to stop for a break in accordance with the rules on driving hours and rest hours, it does not necessarily imply that you cannot spend the night at your own home, if it is close by. This may imply, that the possibility for tax-free allowance stops.

Form for travel information, calculation and documentation

You can use this form as an employee or an employer. The form helps you to to remember all the information required for travel-documentation, and to use the correct rates.

The travel-form is an online pdf, that you can fill out and save on your computer. 

 

Form for calculation of tax-free travel allowance

Form for calculation of tax-free travel allowance - example

More information:

Read more about Tax-free travel allowance (in Danish)

For more detailed and judicial information, see the section Travelexpenses in 'Den juridiske vejledning' (only in Danish).