Rules on taxation of business travel

There could be money to be saved for your company by checking whether the upcoming trip is tax deductible. This can determine the activities that will take place during your stay. There are no clear-cut rules on when you can claim a deduction, but below we at Corporate Travel & Events have compiled the general deduction rules to help you see if your upcoming trip meets the rules for corporate travel tax deductions.

Deductions for business travel are generally distinguished between two types of travel for employees, study trips and holiday trips. A study trip is deductible, while a holiday trip is taxable. Some parameters are often used to determine whether a trip is a conference or study trip or a holiday trip.

Is this continuing education?

If your employees are not aiming to maintain or update a piece of knowledge they use in their work, but instead want to acquire new skills, deductions may not be available. This means that if the trip is to build up skills for a new position, then it is further training - and this is generally not deductible.

The company trip must have an educational element relevant to the individual's function in the company. This could be a customer visit to a supplier or a training workshop

Are there too many tourist elements?

Deductions for study or conference trips are excluded if a business trip contains too many tourist elements. This could be, for example, excursions to places of interest. If there is only a limited tourist element to the trip, it can be deducted. The same will often apply if courses are held in a tourist location.

Is the academic content too general?

If the professional content of the trip is too general, no deduction can be made. An example might be an accountant who receives training in memory techniques. In this case, the professional content would not contribute sufficiently to the acquisition of income required for the deduction of business travel. The same applies to the concept of team building - as a starting point, this is not enough unless it is based on something professional.

Is there a link between the content of the trip and the income-generating activities of the company?

As mentioned earlier, the profession must provide a sufficient level of income to be deductible. That is, if an employee attends a course that will maintain his/her high level of professional practice, it will often be deductible.

Cooperation with CTE

We are always in dialogue with our clients about the purpose and content of their trip to ensure that the framework of the professional programme is interesting, inspiring and surprising for the employees. We don't interfere with what you talk about in your meetings, but are happy to ask about the agenda for the trip in order to support it with the choice of activities and setting in general.

A good company tour must have just the right balance of relevant professional content, experiences at the destination and also ensure a common thread and a good flow in the programme. All in all, this helps to ensure that all parties have a valuable trip, which means that the owner, the director and the employees return home with both arms above their heads and a huge smile on their faces.

More info

There are many grey areas in the above and if in doubt, you are always welcome to contact SKAT and get an assessment from them.

You can also read more at tax.dk, where you can also read decisions on previous cases.