Can I pay myself mileage allowance as a sole proprietor?
As a sole proprietor, you cannot pay yourself tax-free mileage allowances in the same way an employer pays an employee.
- It’s possible under certain conditions, but practices vary.
- Keep a mileage log and check with the tax authority.
- Allowances are not tax-free like they are for employees.
As a sole proprietor, you cannot pay yourself tax-free mileage allowances in the same way an employer pays an employee. However, vehicle-related expenses can be deducted in your business taxation. This requires accurate documentation, such as a mileage log.
If you charge travel expenses to a client, remember to add VAT to the invoice.
Business Advisor
Tuija Räihä-Pundars
- Running companies, new entrepreneurs
- Businesses' workforce and competence needs
- Regional responsibility: Vaasa, Korsholm
