Ltd with a retired manager. Business trips abroad

Ltd with a retired manager.

Business trips abroad   

 

Question:

Hello,
My question is as follows: Our company is OOD. We have a manager who is a pensioner since 2010. There is a contract for a UC and a contract for personal labor without remuneration. We pay only health insurance. In 2012 and 2013, the company posted it several times as a truck driver entirely at the company's expense and paid trips for it. My question is should I owe any insurance for this and what if it is proportionate for his stay abroad.

 

Answer:

Hello,

in respect of travel expenses incurred by the partners in the company, the applicable normative acts and in particular the Law on Taxation and Insurance Act, the Corporate Social Insurance Act and the Regulation on the elements of remuneration and income on which contributions are made shall apply.
The natural person (the owner of the capital) and the legal person (OOD) are two separate tax entities. In order to carry out their economic activity, they can enter into different legal relationships.
According to Art. 33, para. 1, item 1 of CITA, the travel and subsistence expenses of individuals (business trips), which are in employment with the taxable person or are hired by him under non-labor relations, including managers, are recognized for tax purposes when the trip and the stay is performed in connection with the activity of the taxable person / we accept that the activity of your company is transport /.

In order to be recognized for tax purposes, the expenses of business associates need to be related to the business of the company. In this regard, the company should hire the individual (in this case, the partner) to perform certain actions in relation to the enterprise's business. Relationships between the company and the partner may be settled in a different way, for example by a management contract under the Commercial Law between the partner who is the manager and the company or another type of contract on the basis on which the person (the owner and manager) personal work, as in your case), fulfilling one of the mandatory conditions of CITA. From the content, implementation and reporting of the legal relationship that has arisen, it will be assessed whether the "travel and stay are done in connection with the business" of the company.

The cost of traveling abroad when the above conditions are met for the purposes of CITA are tax-deductible to their actual amount. Account should also be taken of the provision of Art. 13 para. 1, item 23 of the Law on Income Taxation that no income tax is paid for travel and subsistence allowances on legal relationships which are not labor-intensive when they are at the expense of the assignor and are documented under the current legislation and the daily subsistence allowance, but not more than twice the amount determined for the persons under employment relationships. If the above double amount is exceeded, the daily money is considered as income for the natural person / manager under the Law on Personal Income Taxation.

From the above-mentioned provisions, it is necessary to conclude that if the sums you have paid for the business trip abroad of the partner do not exceed the double amount specified in the normative acts / the Ordinance on business trips abroad, they are not considered as taxable the income of the person and no social security contributions are due.

I hope we have been helpful.

Greetings.