03.11.2015
As of 1 January 2016, the amendment of section 13 subsection 3 clause 1 of the Income Tax Act (ITA) will take effect, according to which the tax exempt limit for daily allowance during an assignment abroad will be 50 euros for the first 15 days but not for more than 15 days per calendar month, and 32 euros per every subsequent day.
This means that the ITA sets two conditions for the payment of tax-exempt daily allowance in the amount of 50 euros:
- the first 15 days of an assignment abroad, and
- up to 15 days in a calendar month.
Below are some examples of the use of tax-exempt daily allowance in the amount of 50 euros. The term ‘assignment abroad’ means a business trip.
| Example 1. |
| An employee is on an assignment abroad on 3 February 2016, and they will be paid a daily allowance in the amount of 50 euros per one day. |
| The same employee is on an assignment abroad from 7 February to 22 February 2016, which means that the assignment lasts for 16 days and they will be paid the daily allowance as follows: |
| • from 7 February to 20 February (14 days) in the amount of 50 euros per day, and
• from 21 February to 22 February (2 days) in the amount of 32 euros per day. |
| Example 2. |
| An employee is on an assignment abroad from 20 January to 27 January 2016, i.e. the assignment lasts for 8 days, and they will be paid a daily allowance in the amount of 50 euros per day. |
| The same employee is on an assignment abroad from 28 January to 12 February 2016, i.e.16 days, and they will be paid a daily allowance as follows: |
| • from 28 January to 31 January (4 days) in the amount of 50 euros per day;
• from 1 February to 11 February (11 days) in the amount of 50 euros per day; and • for 12 February (1 day) in the amount of 32 euros per day. |
| Example 3. |
| An employee’s assignment abroad lasts from 4 March to 18 March 2016, i.e. 15 days, and they will be paid a daily allowance in the amount of 50 euros per day. |
| The same employee’s next assignment lasts from 28 March to 14 April 2016, i.e.18 days, and they will be paid a daily allowance as follows: |
| • from 28 March to 31 March (4 days) in the amount of 32 euros per day;
• from 1 April to 11 April (11 days) in the amount of 50 euros per day; and • from 12 April to 14 April (3 days) in the amount of 32 euros per day. |
| Example 4. |
| An employee’s assignment abroad lasts from 25 April to 18 July 2016, i.e. 75 days, and they will be paid a daily allowance as follows: |
| • from 25 April to 30 April (6 days) in the amount of 50 euros per day;
• from 1 May to 9 May (9 days) in the amount of 50 euros per day; and • from 10 May to 8 July (the remaining 60 days) in the amount of 32 euros per day. |
| Example 5. |
| An employee is also on assignment abroad during the holiday season, i.e. from 28 December 2015 to 18 January 2016, and they will be paid a daily allowance as follows: |
| • from 28 December to 31 December 2015 (4 days) in the amount of 50 euros per day pursuant to the regulations effective in 2015;
• from 1 January to 15 January 2016 (15 days) in the amount of 50 euros per day pursuant to the regulations effective as of 2016; and • from 16 January to 18 January 2016 (3 days) in the amount of 32 euros per day. |
| The situation will be the same if an employee is on an assignment abroad from 1 January to 18 January 2016. They will be paid a daily allowance for an assignment abroad only pursuant to the regulations effective as of 2016: |
| • from 1 January to 15 January 2016 (15 days) in the amount of 50 euros per day and from 16 January to 18 January 2016 (3 days) in the amount of 32 euros per day. |
If the daily allowance paid for an assignment abroad exceeds the tax exempt limit, the amount exceeding the tax exempt limit has to be taxed and declared with the salary (as an income from employment in Annex 1 of Form TSD).
http://www.rmp.ee/maksud/maksud_yldiselt/naited-valislahetuse-paevaraha-maksmis… 13.11.2015
