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Publication date: 24.04.2024
active and purposeful military lawyer with more than 4 years of experience
A seconded employee paid for accommodation in a double room: what are the tax consequences?
If the seconded employee paid for accommodation in a double hotel room for two, then reimbursement of expenses to him and their allocation to the company's expenses is carried out on the basis of the cost of accommodation for only one person. If the enterprise reimburses the employee the full cost of a double room, then the cost of the second place in this room will be considered an additional benefit in accordance with subsection 164.2.17 of clause 164.2 of article 164 of the Tax Code of Ukraine, and will be included in the total monthly (annual) taxable income of the taxpayer.
LEGAL ANALYSIS
In accordance with subsection 165.1.11 of clause 165.1 of article 165 of chapter IV of the Tax Code of Ukraine (hereinafter referred to as the Tax Code of Ukraine) the total monthly (annual) taxable income of the taxpayer does not include funds received by the taxpayer for a business trip or for a report and calculated in accordance with clause 170.9 of article 170 PKU, as well as the amounts of compensation payments in foreign currency, which are paid in accordance with the law to employees of the diplomatic service sent on a long-term business trip.
Clause 170.9 of Article 170 of the Code of Civil Procedure provides for the taxation of the sums of excessively spent funds received by the taxpayer for a business trip or for a report and not returned within the prescribed period.
According to subsection 170.9.1. paragraph 170.9 of Article 170 of the Civil Code is not the income of a taxpayer - a natural person who is in labor relations with his employer or is a member of the management bodies of enterprises, institutions, organizations, the amount reimbursed to him in accordance with the procedure established by law for travel expenses within the limits of actual expenses, namely, for travel (including luggage transportation, booking transport tickets) both to the place of business and back, as well as to the place of business (including on rented transport), payment of the cost of accommodation in hotels (motels), as well as expenses included in such bills for food or household services (washing, cleaning, mending and ironing of clothes, shoes or linen), for renting other living quarters, paying for telephone calls, issuing foreign passports, entry permits (visas), mandatory insurance, other documents registered expenses related to the rules of entry and stay at the place of business, including any fees and taxes payable in connection with the implementation of such expenses.
The specified expenses are not subject to this tax only if there are supporting documents certifying the value of these expenses in the form of transport tickets or transport invoices (baggage receipts), including electronic tickets in the presence of a boarding pass, if its obligation is stipulated by the rules transportation to the corresponding mode of transport, and settlement documents on their purchase for all modes of transport, including charter flights, invoices received from hotels (motels) or from other persons providing services for the accommodation and residence of an individual, including the reservation of seats in places of residence, insurance policies, etc.
In accordance with clause 5 of section II of the Instructions on business trips within Ukraine and abroad, approved by the order of the Ministry of Finance of Ukraine dated March 13, 1998 No. 59, the company, subject to the availability of supporting documents (in original), reimburses within the limit of the expenses for the rental of residential premises to seconded workers for the rental of living space based on the calculation of the cost of one place in a hotel (motel), another living space for each day of such stay, taking into account the costs of using the telephone (except for the costs of business telephone calls), refrigerator, TV included in the bills for payment of the cost of living and other costs.
After returning from a business trip, the employee is required to provide a Report on the use of funds issued for the business trip or a report, while the main condition for reimbursement of travel expenses is the availability of original documents confirming the cost of such expenses (tickets, receipts, checks, calculations, etc.).
So, if the seconded employee paid for accommodation in a double hotel room for two, then the reimbursement of expenses to him, including them as part of the company's expenses, is carried out based on the calculation of the cost of accommodation for only one person. If the company reimburses the employee the full cost of a double room, then the cost of the second place in this room will be considered an additional benefit in accordance with subsection 164.2.17 of clause 164.2 of article 164 of the Code of Civil Procedure, and will be included in the total monthly (annual) taxable income of the taxpayer.
Additional benefits are taxed at the rate determined by subsection 167.1 of Article 167 of the Civil Code (18 percent).
