Law on business travel and expense reports updated

The recent amendment to the Tax Code of Ukraine, Law # 2888-IX, brings significant changes to expense reports and tax accounting in the country. Effective from April 1, 2023, these updates aim to streamline the relationship between businesses and state institutions, fostering smoother operations and improved transparency. This article provides a concise overview of the key changes and their implications for businesses in Ukraine.

Key Points:

1. Proving Business Travel and Accountable Transactions:
   • Documentation requirements for proving business travel and accountable transactions have been revised.
   • In addition to the Director’s order, travel documents and proof of accommodation are now necessary.
   • A business trip certificate can serve as supplementary evidence of the employee’s compliance with the planned trip.
     
2. Elimination of “Empty” Expense Reports:
   • The option of submitting “empty” expense reports, where per diems are received without personal funds being spent, is no longer applicable.
   • Per diem limits for domestic and international travel remain unchanged.
     
3. Categorized Expense Documents:
   • Expense documents are now required to be divided into categories, including transportation passes/tickets, accommodation and insurance documents, and proof of completed payment transactions.
   • Statements and information from relevant accounts can be used to confirm cashless transactions, but additional documents may also be necessary.
     
4. Deadlines for Expense Report Submission:
   • Employees must submit relevant expense documents within the month following the business trip or civil legal action.
   • Extensions of up to one month are possible for funds debited after the trip when using payment instruments.
   • Cash expenses must be reported within two working days of receipt.
     
5. Electronic Submission of Expense Reports:
   • Expense reports can be submitted in printed or electronic form using approved templates.
   • Compliance with laws on electronic document management and electronic trust services is necessary for electronic submissions.
   • Electronic document management services like “Vchasno” or “M.E.Doc” can facilitate quick uploading and signing of documents with a qualified electronic signature.
     
6. Specific Circumstances for Expense Report Filing:
   • Expense reports must be filed when there is taxable income or when cash usage exceeds per diem amounts.
   • If electronic money is used without taxable income, expense reports are not required.
   • Internal procedures and templates can be established for controlling funds without filing formal expense reports.

The recent amendments to Ukraine’s Tax Code bring revolutionary changes to expense reports and tax accounting. These changes streamline documentation requirements, introduce electronic submission options, and establish clear guidelines for supporting documents. By complying with the new regulations, businesses can enhance efficiency, transparency, and compliance in their financial operations. Stay updated with the evolving landscape of expense reports and tax accounting to ensure smooth business operations in Ukraine with Leinonen!