A personal car is not one that is owned or possessed by the employer. It’s not necessarily the one that is owned or possessed by the employee as well, but s/he should have a proven right to use this vehicle.
Expenses for the use of a personal car could be tax-exempt in the following cases:
- business trips to an official
- business trips to an employee who is an Estonian taxpayer
- a member of the management or control body of a company
- rides between the place of work and the residence if it’s not possible to do it by public transport with reasonable time and money costs
- rides between the place of work and the residence if your employee in Estonia lives 50+ km from the place of work
In summary, using these fringe benefits an entrepreneur will be able to provide additional motivation to their employees notably independent contractors as long as they can participate in the sports events in their cities, and counties, or, for instance, have a mobile app for fitness.
Motivation is a driver for business growth, and besides, an entrepreneur will get tax incentives under the conditions described in Estonian law. While legislation may seem a bit complicated, Enty gives businessmen solutions to automatize basic accounting and get professional advice on Estonian taxation.