The company, which sends employees to various cities and towns of Ukraine in order to fulfil their official tasks, has a choice. It can pay for their travel by public transport, for example, by train or bus, and may provide an official car for a business trip.What is the procedure for recording of expenses for using a car on a business trip?
General rules
According to the general rules, the compensation of employees’ expenses in connection with official business trips, including transportation, is guaranteed by Art. 121 of the Code of Labor Laws of Ukraine (hereinafter − Labor Code). In this case, the procedure of their compensation, established by the Guidelines on business trips within Ukraine and abroad, approved by the order of the Ministry of Finance of Ukraine dated March 13, 1998, No. 59, mandatory for execution only by companies financed from the budget. Other companies can use it at their own will.
Thus, an employee travelling on official business trip by official car, along with usual expenses, can count on guaranteed compensation for so-called auto-expense − the costs associated with the purchase of fuel and lubricants (hereinafter − FL), the cost of parking (parking lot), repair of cars on business trips and etc.
FL expenses
In order to account the write-off of FL, which are actually spent on business trips, it is necessary using travel letters, although they are not mandatory for a long time. It should be recalled that the Typical form of travel letter of an official car and the procedure for its application have expired on 16.04.2013, in accordance with the order of the State Statistics Service of Ukraine dated March 19, 2013, No. 95. However, in practice, companies that operate motor vehicles continue to use this document in their economic activities (for the account of driver’s working time, the write-off of FL, etc.).
It should be added that the company can use as canceled form of a travel letter as independently developed on its basis. The main thing is that this document should have all the necessary details of the primary documents provided for in part two of Art. 9 of the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” of 16.07.1999, No. 996-XIV and para. 2.7 of the Regulation on the Documentary Provision of Records in the Accounting, approved by the Order of the Ministry of Finance of 24.05.1995, No. 88.
We recommend describe the route of the car in the travel letter in detail in connection with business trip. It will be a confirmation of the FL expenses, depending on the mileage (indicators of the speedometer) and the prescribed rates of FL consumption (depending on the type of vehicle). It is clear that there is no place for a complete indication of the route in the “old” typical form of the travel letter. Therefore, the company should develop its own sample of a travel letter, which will enable the indication of the route.
Regulations of FL write-off
The FL are written off taking into account the Norms of fuel and lubricants consumption in motor vehicles, approved by the Order of the Ministry of Transport of Ukraine dated February 10, 1998, No. 43 (hereinafter − Regulations No. 43). The Regulations of consumption of FL for cars are calculated according to the formula given in para. 4.1 of the Norm No. 43. Standard FL costs at the company should be fixed by an appropriate order at the company and used for control.
We consider it is necessary to draw attention to the letter of the Ministry of Infrastructure of Ukraine dated January 21, 2017, No. 1441/18/10-17. It provided an explanation of the Regulations of consumption of FL by vehicles of the company. The Ministry of Infrastructure recalled that Regulations No. 43 were intended, in particular, to plan the needs of company, organizations and institutions in FL and control of their costs. In this case, economic entities independently establish normative expenses of fuel in accordance with the specific operating conditions, taking into account the internal policy of the company and on the basis of the actual need identified by them within the framework of a single transparent system of regulation.
However, according to the profile ministry, the establishment of standard fuel consumption can not be based directly on the actual volumes of fuel consumption used by the car. Further, the Ministry of Infrastructure makes quite interesting conclusions in the above-mentioned letter, namely: FL write-off by road transport of business entities, regardless of departmental subordination, form of ownership or form of taxation, is meaningful to carry out in accordance with the Regulation No. 43.
The use of standard fuel consumption by the company that exceeds the maximum permissible values set by the Regulation No. 43 or the uncontrolled write-off of fuel and lubricants under “actual expenses” is unacceptable in Ukraine as it creates conditions for abuse.
Thus, the Ministry of Infrastructure supports the requirements of the SFSU regarding the mandatory write-off of the cost of FL by road vehicle as well as the verification of the correctness and validity of these calculations by economic entities, regardless of departmental subordination, form of ownership or form of taxation under Regulation No. 43.
Taxpayers, when it is about the write-off of FL, always appeal to the Regulation No. 43 (letters dated August 12, 2016, No. 17575/5/99-99-13-02-03-15, dated November 22, 2016, No. 12487/З/99-99-13-01-02-14, dated January 20, 2017, No. 1186/6/99-99-15-02-02-15). And if the costs of FL exceed the linear norm provided by the Regulation No. 43, then, according to controllers, the fuel should be written-off in accordance with the rules of accounting on the basis of the corresponding document approved by the order of the company. The presence of such approved FL regulations allows the company to retain a tax credit, formed on the amount of excess fuel expenditures, since the company can document the use of fuel in economic activity.
In the absence of the approved regulations for fuel, the company will have to accrue the VAT obligations in accordance with para.198.5 of TCU.
At the same time, the SFSU in the above-mentioned letters summarizes: it is not necessary to adjust the financial result before taxation to the amount of excess of fuel consumption over the linear norm.
Therefore, a business trip by car is connected with compliance of certain rules of FL consumption which affects the accounting of such costs.
