Mileage and fuel
Fuel is only deductible if you have a short term rental car or if the company has a company car that no one is allowed to use for personal trips. It is not deductible if you drive your own car or if you borrow a car from a friend. In these cases you should compensate yourself through tax free mileage. If the company still pays for fuel the car owner should be taxed for fuel benefits, which is administratively time consuming and in most cases economically less attractive than mileage. Mileage for higher sums than accepted by the tax authorities is taxed as salary.
The most common mistakes:
- To pay fuel receipts with the company’s money as compensation for using a private or borrowed car for trips on behalf of the company.
- Not keeping a driving log and deducting mileage compensation for trips made on behalf of the company.
- Not deducting mileage compensation for business trips made with a car that you are paying taxes for benefits