Revenue eBrief No. 078/20
Tax treatment of the reimbursement of expenses of travel and subsistence to office holders and employees (Clarifications)
The material in Tax and Duty Manual Part 05-01-06 has been updated to include the following:-
- Clarification at Paragraph 1 that Civil Service travel and subsistence rates apply exclusively to payments made by employers to employees; and
- At Paragraph 4.12 members of non-commercial bodies, to clarify that section 195A of TCA 1997 applies to expenses of travel and subsistence for attendance at relevant meetings.
This manual explains the tax treatment of reimbursement of travel and subsistence expenses to employees (including directors).In practice, one of two scenarios will generally arise:
1.The employer does not reimburse an employee for the cost of travel and subsistence, or
2.The employer reimburses an employee for the cost of travel and subsistence.
In the first scenario, an employee may claim a tax deduction for travel and related subsistence expenses necessarily incurred in performing the duties of her/his employment by submitting a claim to her/his Revenue office. There are no circumstances where it would be appropriate for a taxpayer to apply the civil service rates of travel and subsistence to themselves in calculating the expenses necessarily incurred in the performance of the employment in question. The civil service rates of travel and subsistence apply only in the case of payments made by employers to employees.
4.12.Members of non-commercial bodies
Section 195A Taxes Consolidation Act 1997 exempts from tax the reimbursement of expenses of travel and subsistence to certain members of non-commercial bodies, in both the public and private sector, in respect of attendance at meetings of such bodies. This section is specific in its application and the exemption only applies to expenses of travel and subsistence for attendance at the meetings.
The exemption applies where the work of the members is generally performed either in the course of meetings of the board or in preparation for such meetings. Incidental duties such as attendance at conventions or meetings as delegates on behalf of the body may be disregarded for this purpose.
For the purposes of this section, a ‘member’, in relation to a body, means a person holding office as a member of that body and who has no other duties in relation to that body. Where a member has other duties, the exemption will simply not apply.
To qualify for the exemption, the member’s annualised emoluments (excluding the expenses) from the body must not exceed €24,000 per annum in the case of the chairperson and €14,000 in the case of other members. The exemption covers expenses up to the Civil Service rates.
A non-commercial body in this context means a body –
- that is organised solely for purposes other than for profits;
- that, in fact, operates other than for profit;
- whose activity income is used by the body to assist it in achieving its purposes;
- does not distribute or otherwise make available any of its income for the personal benefit of any officer, employee or member or connected person other than as wages, salaries, fees or honorariums for services rendered.
See Tax and Duty Manual Part 05-02-19 for further information in respect of Non-Executive Directors attending board meetings.