Overnight of an employee in a hotel at company costs

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A taxpayer who employs employees in his / her business activity has the right to increase tax deductible costs by expenses incurred as part of the employment relationship. The most common costs include gross wages and salaries, as well as paid social security contributions financed by the employer (payer). As you know, in practice it often happens that company employees are delegated to go on a business trip, e.g. to meet a contractor in another city. So, in such a case, is it possible to include the expenses for the employee's accommodation in the hotel as tax costs? Yes, but with a few conditions.

Cost of getting income

As a rule, in order for the taxpayer to be able to increase the tax deductible costs as part of the conducted activity, the expenses must meet the conditions resulting from the definition of costs included in the Income Tax Act (PIT). Pursuant to Art. 22 sec. 1, the expenses may be included in the tax costs if they were incurred in order to obtain revenues or to secure or maintain the source of these revenues. The exception are the expenses listed by the legislator in Art. 23 sec. 1, which - regardless of the purpose of incurring - may not constitute a tax deductible cost.

Importantly, the taxpayer should remember that all expenses incurred as part of the activity are properly documented, e.g. in the form of invoices or bills, because such an obligation is imposed on him by the Regulation of the Minister of Finance on keeping a tax book of revenues and expenses.

Only after proving a direct or indirect relationship between the documented expenses and the income obtained, the taxpayer may reduce the income tax liability to the tax office. This also applies to expenses incurred in the employment of employees.

Employee accommodation expenses

With regard to business trips of company employees, the taxpayer may include expenses incurred by them during the business trip as tax deductible costs. You can mention here, among others employee diets, travel costs, costs of using local transport and expenses for accommodation in a place of temporary stay. It is also necessary to draw up a business trip recommendation.

The obligation of proper documentation also applies to expenses incurred by employees during the performance of activities necessary during a business trip, including accommodation.An entrepreneur, in order to be able to include a given expense as tax costs, must obtain an appropriate accounting document - an invoice or a bill. Then, on the basis of the document, the expense should be entered in column 13. KPiR - Other expenses.

Importantly, in the case of active VAT payers, there is no right to reduce the tax due by the amount of input tax on the invoice for the employee's accommodation, because according to the provisions of the VAT Act, hotel services have been excluded from this possibility - similarly to catering services (Article 88 (1) point 4 of the VAT Act).

The confirmation of recognizing the expenses for an employee's accommodation in a hotel as a tax cost is the individual interpretation of the Director of the Tax Chamber in Łódź of September 18, 2013 (IPTPB3 / 423-240 / 13-2 / GG), in which he stated:

"The basic condition for crediting the amounts paid to the employee in respect of paid accommodation to tax deductible costs is to prove that the work provided by him will be performed in order to achieve (preserve or secure) the income. If this condition is met, the tax deductible cost will be the equivalent of the accommodation costs reimbursed to the employee. "

Therefore, the taxpayer, including the reimbursement of expenses incurred for the accommodation of an employee during a business trip as tax deductible costs, must remember that it is the taxpayer's responsibility to prove the relationship with the earned income.