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Deduction (Travel)

What is a Deduction (Travel)?

When it comes to corporate travel, companies will have to pay for a range of travel-related expenses. Given that these costs are associated with business, they can be deducted. This means that the company will receive reimbursements for part of those costs. The process varies from one country to the next, so businesses should be sure to work with qualified and knowledgeable accountants.

What is defined as corporate travel?

The formal definition of corporate travel used by tax authorities will vary from one country to the next. This is why it is important that businesses work with trusted providers who possess the appropriate tax knowledge.

In the US, the IRS describes corporate travel as a trip that is taken away from a tax home overnight and lasts “substantially longer than an ordinary day’s work.” It is also critical that the travel lasts for less than a year for the trip to be considered as corporate travel.

Which costs are eligible for a Deduction?

The costs that can be deducted will vary from one territory to the next, but those costs generally revolve around the following areas:

  • The costs that are associated with operating a vehicle, such as parking and tolls costs.
  • Transportation costs such as taxis, public transport, and other modes of transportation.
  • The costs that are associated with lodging such as hotel rooms.
  • The costs for meals and food while away from home.

What is needed to make a deduction?

For a deduction to be made, business travelers will have to diligently track expenses and save all of the receipts that they collect throughout their trip. These receipts should include the date, amount, expense details, and the business purposes.

Companies will be able to outline specific protocols in a corporate travel policy to ensure that business travelers are compliant and all of the appropriate deductions can be made.