What Is A Business Trip?
A business trip is defined as travel undertaken for business purposes that serves the company's interests. Both company members (shareholders and board members) and employees—including contractors—can go on business trips, though contractors are not eligible for daily allowance.
To qualify as a business trip, it must meet the following criteria:
- There is a clear business purpose behind the trip.
- The trip has well-defined start and end dates.
- It involves travel between two different countries (including Estonia). Local trips within the same country, such as visits to clients, are not considered business trips. However, some expenses from local trips (such as public transportation) may still be deductible.
- Traveling from Spain to Paris to attend the FinFrench Fintech conference from August 12 to August 19.
- Visiting a client in Estonia to assist with product development for a month.
- Traveling to Italy for two days to sign contracts and finalize agreements with a new customer.
- Spending 3 months in Thailand to "write about it on your blog" (even if you are a blogger).
- Traveling to your home country to visit family.
- Leisure trips or vacations.
- Be cautious when scheduling business trips during well-known vacation periods (e.g., December 23 to December 26) to avoid scrutiny.
Consider the example of a travel blogger spending three months in Thailand. While certain expenses, such as renting an office or booking flights, may be deductible, claiming the entire trip as a business expense—especially asking for a daily allowance—without a clear and specific business reason would not be acceptable.
A legitimate business trip must have a specific purpose (attending a conference, working onsite with a client, etc.) and a limited duration. Generally, anything longer than a month may raise red flags.
To classify a trip as a business trip, you need documentation to support the business purpose. This could be conference tickets or a signed agreement if an employee is traveling to work with a client.
You should also gather documentation for any deductible business expenses incurred during the trip. If you’re eligible for a daily allowance, it’s a good idea to collect receipts for non-deductible expenses as well.
For these expenses, you need invoices issued to your company, which should be uploaded in the "Purchases" section in Companio.
- Flight tickets.
- Accommodation (hotels, AirBnB, etc.).
- Taxi or public transportation to/from the airport.
- Transportation for client visits or events.
- Coworking space or other business-related expenses.
Tip: Many hotels and AirBnB provide business invoices, and opening a business account with your preferred airline can make obtaining proper invoices easier.
These expenses justify your daily allowance. Collect receipts and upload them to the "Travels" section in Companio.
- Meals, beverages.
- Entertainment (magazines, books, etc.).
- WiFi purchased at the airport.
- Gifts or souvenirs.
- Personal expenses.
To add a business trip in Companio, follow these steps:
Log in to Companio and go to the "Travels" section.
Click on "Add business travel" and follow the instructions:
- Who is traveling? Select a board member, shareholder, employee, or contractor.
- Description and documentation: Add a description of the trip and upload the document that justifies the business trip.
- Origin, destination, and dates: Specify the start and end dates, as well as the departure and arrival locations.
- Accommodation and travel expenses: Enter the estimated costs. If you don't know the exact amounts yet, just enter an estimate—our accountants will adjust it later if needed.
Our system will calculate the daily allowance based on who is traveling and the trip duration. It will also generate the business travel expenses document.
If the traveler is entitled to a daily allowance, the trip will be placed in "Pending" status for approval by one of our accountants.
To qualify as a business trip, it must meet the following criteria:
- There is a clear business purpose behind the trip.
- The trip has well-defined start and end dates.
- It involves travel between two different countries (including Estonia). Local trips within the same country, such as visits to clients, are not considered business trips. However, some expenses from local trips (such as public transportation) may still be deductible.
Examples of Business Trips
Valid Business Trips:
- Traveling from Spain to Paris to attend the FinFrench Fintech conference from August 12 to August 19.
- Visiting a client in Estonia to assist with product development for a month.
- Traveling to Italy for two days to sign contracts and finalize agreements with a new customer.
Non-qualifying Trips:
- Spending 3 months in Thailand to "write about it on your blog" (even if you are a blogger).
- Traveling to your home country to visit family.
- Leisure trips or vacations.
- Be cautious when scheduling business trips during well-known vacation periods (e.g., December 23 to December 26) to avoid scrutiny.
Why Is This Definition Important?
Consider the example of a travel blogger spending three months in Thailand. While certain expenses, such as renting an office or booking flights, may be deductible, claiming the entire trip as a business expense—especially asking for a daily allowance—without a clear and specific business reason would not be acceptable.
A legitimate business trip must have a specific purpose (attending a conference, working onsite with a client, etc.) and a limited duration. Generally, anything longer than a month may raise red flags.
What Are Deductible and Non-Deductible Expenses on a Business Trip?
To classify a trip as a business trip, you need documentation to support the business purpose. This could be conference tickets or a signed agreement if an employee is traveling to work with a client.
You should also gather documentation for any deductible business expenses incurred during the trip. If you’re eligible for a daily allowance, it’s a good idea to collect receipts for non-deductible expenses as well.
Examples of Deductible Business Expenses:
For these expenses, you need invoices issued to your company, which should be uploaded in the "Purchases" section in Companio.
- Flight tickets.
- Accommodation (hotels, AirBnB, etc.).
- Taxi or public transportation to/from the airport.
- Transportation for client visits or events.
- Coworking space or other business-related expenses.
Tip: Many hotels and AirBnB provide business invoices, and opening a business account with your preferred airline can make obtaining proper invoices easier.
Examples of Non-Deductible Expenses:
These expenses justify your daily allowance. Collect receipts and upload them to the "Travels" section in Companio.
- Meals, beverages.
- Entertainment (magazines, books, etc.).
- WiFi purchased at the airport.
- Gifts or souvenirs.
- Personal expenses.
How to Add a Business Trip in Companio
To add a business trip in Companio, follow these steps:
Log in to Companio and go to the "Travels" section.
Click on "Add business travel" and follow the instructions:
- Who is traveling? Select a board member, shareholder, employee, or contractor.
- Description and documentation: Add a description of the trip and upload the document that justifies the business trip.
- Origin, destination, and dates: Specify the start and end dates, as well as the departure and arrival locations.
- Accommodation and travel expenses: Enter the estimated costs. If you don't know the exact amounts yet, just enter an estimate—our accountants will adjust it later if needed.
Our system will calculate the daily allowance based on who is traveling and the trip duration. It will also generate the business travel expenses document.
If the traveler is entitled to a daily allowance, the trip will be placed in "Pending" status for approval by one of our accountants.
Updated on: 06/09/2024
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