Tax-free expense reimbursement
When you reimburse expenses paid out of pocket by the employee, this is fully deductible: computer, phone, bicycle, internet connection, parking, car wash, home office, representation... In principle, you need to be able to justify these expenses with supporting documents.
However, there is a simpler method šļø: flat-rate expense reimbursement. The NSSO describes and evaluates these expenses every year (see the NSSO website). This way, everyone saves time ā no need to submit an expense report for every small purchase.
Good news: this flat-rate reimbursement is deductible for the business/company, is not subject to NSSO contributions, and is not taxed in the hands of the employee!
š” Even when using the flat rates accepted by the NSSO for employees, you must still be able to justify the amounts of these flat rates.