An employer/company can pay daily lump-sum allowances for foreign business travel to employees or company directors in order to reimburse their expenses. In principle, no tax-free lump-sum allowances are permissible for business trips of more than 30 calendar days. However, in the past, the Rulings Commission agreed that, under certain circumstances and up to a certain amount, a lump-sum reimbursement can be madefor business trips of up to 24 months.
In a recent practice note of 10 October 2013, the tax authorities redefined their point of view regarding the lump-sum reimbursement of travel expenses incurred during foreign business trips exceeding a period of 30 calendar days. Daily lump-sum allowances paid to reimburse these expenses can be exempt from tax for business trips of up to 24 months. The lump-sum reimbursements should, in these cases, be calculated in accordance with the list of allowances paid by the Federal Public Department of Foreign Affairs to its posted agents and be limited to 60% of the amounts applicable for civil servants on a mission abroad.
For more information, we refer to the practice note (Ci.RH.241/609.972 of 10 October 2013).