Tax free car compensation & GPS log book go hand in hand
We have discussed the compensation paid for the use of a personal passenger car in the past briefly. Now is a good time to repeat the principles so that you can compensate your employees’ work trips tax-free and easily.
Compensation paid for the use of a personal passenger car – what is it?
This is financial compensation that the company can pay to board members and employees who use a personal car for work.
Good to know:
- the limit of car compensation is 0.3 € per kilometer and up to 335 euros per month per car and per person in the company;
- the payment of compensation is regulated by a regulation of the Government of the Republic;
- only the use of passenger cars (M1 and MG1) can be reimbursed (except for staff with special needs)
- in addition to fuel, other car costs can be reimbursed, such as parking fees and repair costs;
- the benefit may be paid monthly or once a year;
- it is necessary to keep a logbook in order to pay compensation.
A car used for business travel must not be in the possession or ownership of the company paying the compensation. The employee using the vehicle does not have to be the owner of the vehicle, but they must prove that they have the right to use the car (authorization or endorsement on the vehicle registration certificate).
I wish to pay my employees the compensation – where to start?
In order to be able to compensate employees tax-free for the use of a personal car, only a few preparations are needed. It is actually very simple!
- Formulate the board’s decision on the payment of compensation, in which you write:
- employee’s first and last name, who will receive the compensation;
- the amount of the compensation;
- the period during which travel expenses are reimbursed (can be several years);
- and attach a document certifying the right to use the car to the decision.
- Order a suitable GPS tracking device for your vehicle from HERE
- Installing GPS devices found in the online store is a breeze. Of course, you can always bring your vehicle to our office, where our technicians are happy to help you.
- Use the Navirec GPS logbook to record work trips
- The trip log automatically registers all trips in a report (including odometer readings, etc.) and allows you to change data when needed both on your computer and on the Navirec mobile app.
Declaration of tax-free benefit
It is important to remember that if an employer has compensated its employees for the use of a personal car, a correct declaration must also be submitted to the Tax Board.
The declaration form INF 14 must be submitted to the Tax and Customs Board by the 1st of February of the following year (e.g. if the compensation was paid for 2020, the declaration must be submitted by February 2021). More detailed information on submitting the declaration and examples can be found on the Tax and Customs Board’s website.
If you want a reliable GPS tracking solution for your company, feel free to contact us and ask for a personal offer!