Tax Alert, May 2019

Position of the Tax Administration regarding the control of the fulfillment of conditions for reimbursement of commuting costs

The Ministry of Finance has taken a stance in its Ruling no. 011-00-12/2019-04 issued on 01.02.2019  that reimbursement of commuting costs needs to be properly documented with credible accounting documents, in order for such costs to be deductible as expenses, in line with the Corporate Income Tax Law. Otherwise, expenses would be considered as non-documented.

Considering the aforementioned stance of the Ministry of Finance regarding the control of the fulfillment of conditions for reimbursement of commuting costs, in communication between Tax Administration and Chamber of Commerce and Industry of Serbia it was clarified that the distance between the place of living of employee and place of work should be considered while determining the amount of reimbursement of commuting costs.

The suggested method of calculation of distance between the place of living of employee and place of work, as well as normative for the consumption of fuel for that relation, is determined by the taxpayer himself via his internal documents (i.e. collective agreement or labor rulebook, as well as via employment contracts).

That said, it should be emphasized that activities on the drafting of Guidelines for the control of the fulfillment of conditions for reimbursement of commuting costs have begun in the Control Department within Tax Administration.