Per Diem on Business Trips Abroad: Which Amounts Are Not Taxable and How to Calculate Them

The Tax Code of Ukraine stipulates that funds received by an employee for a business trip or on account are not included in their taxable income if they are used and documented in accordance with legal requirements.

In particular, per diem expenses for meals and other personal needs of the employee during the business trip are not included in taxable income. For business trips within Ukraine, the non-taxable per diem amount is no more than 10% of the minimum wage established as of January 1 of the respective year, for each day of the trip. For foreign business trips, the maximum per diem amount is up to 80 euros per day at the official NBU exchange rate.

For employees of government bodies, budget institutions, and organizations, the procedure for business trips and the amount of expenses are determined by the Cabinet of Ministers of Ukraine. At the same time, the per diem amount cannot exceed the limits established by the Tax Code.

The per diem amount is determined as follows:

• for trips within Ukraine and to countries where Ukrainians do not require a visa — based on the business trip order and primary documents;
• for trips to countries requiring a visa or special permit — additional documents confirming the actual stay on the business trip are required (border crossing stamps, travel documents, accommodation bills, etc.).

If there are no supporting documents, the per diem amount is included in the employee's taxable income, the Tax Service noted.

The main document regulating business trips of employees of government bodies and budget institutions is the Instruction on Business Trips, approved by the Ministry of Finance Order No. 59. Other enterprises may also use it as a guideline.

The Instruction provides the following rules for reimbursing per diem during foreign business trips:

• for each day of the business trip, including the day of departure and return, per diem is paid according to the norms of the destination country if there were no transfers or stops in other countries en route;
• if there are transfers or overnight stays in other foreign countries during the trip, per diem for the time spent in their territory is paid according to the norms of those countries from the day of border crossing;
• if during one day the employee crosses the borders of several foreign countries, the per diem is determined as the arithmetic mean of the established norms for those countries;
• the day of crossing the border of the destination country is paid according to the norms of that country regardless of transfers or stops in other countries;
• the day of departure from Ukraine without stops on Ukrainian territory is paid according to the norms of the first foreign country where the transfer or stop occurs;
• the day of arrival in Ukraine is paid according to the norms of the last foreign country where the transfer or stop occurred.

If during the trip abroad the employee has a transfer or stop on Ukrainian territory, expenses for the time spent in Ukraine are reimbursed according to domestic business trip rules. At the same time, the period from the last transfer in Ukraine before leaving abroad to the first transfer in Ukraine after returning is paid according to foreign business trip norms.

If there are no transfers or stops on Ukrainian territory during the trip, all days of the business trip, including the day of departure and return, are paid according to the norms established for foreign business trips.

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