Starting from 1 July 2019, before an employee is sent on a business trip companies will have to check whether hotels possess relevant accreditation. This will help to prevent disputes with tax authorities over the deduction of business trip costs for profit tax purposes.
Hotels with 50 rooms and over are now obliged to obtain a certificate of assessment of their category. The certificate is issued by a special accredited organization. Earlier, such categories (stars) were obtained voluntarily.
In this regard, an employer should request a copy of such certificate when it books a room in a hotel. The validity period of the certificate is three years. If it turns out that the employee stayed at a non-accredited hotel, tax authorities may refuse to allow the deduction of accommodation costs incurred during the business trip.
Please be reminded that the following are deemed to be included in business trip costs:
· travel costs;
· accommodation costs;
· costs involving living other than at the employee’s place of residence (daily allowance);
· other costs of the employee permitted by the employer.
In order to reduce the profit tax base, business trip costs must be supported with documents. An exception to this is the daily allowance, for which an employee does not have to account.
Please contact Acsour’s specialists as to how tax legislation should be applied.