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Travel expenses and other deductions — “light” entrepreneurship

If you are a self-employed person and you have a contract with an invoicing service company, there are tax-deductible expenses that you may have paid because of your work. These expenses include travel, tools, and other costs that have a direct connection to your work.

Do you receive wages — or do you receive trade income? The deductions are different for these two income types.

Please find out first what the type of income is:

Is the invoicing service company paying you wages?

Is the invoicing service company paying you trade income?

If you receive both wages and trade income during the year, the tax reporting is different for these 2 categories. To get the deductions, you must enter the travel and other expenses into different sections of the tax forms. See instructions below.

Please note that because of your wage income, an automatic deduction of €750 is given you. This is the standard deduction for work-related expenses. Accordingly, you should only inform the Tax Administration of travel, commuting, and other expenses for the production of wage income when your expenses have been more than €750 during the year.

Recipients of trade income do not have the €750 threshold. So, you have to report your travel expenses that support your trade income even if the sum stays below €750.

Keep a driver’s logbook and write your expenses down

If your work involves driving your car, motorcycle, moped or other vehicle, keep a logbook. The logbook can be a useful if you need to prove how many kilometres per year you needed for your work. The remainder of the kilometres are non-deductible private kilometres.

Your tax-deductions can only consist of costs for the production of income – for example, the annual travel expense caused by trips to visit customers.

Write the amounts down, keep records and save the receipts for all work-related other costs, too. Telephone costs are a typical example. However, do not enclose receipts or similar paper slips with your income tax return. Instead, keep them in storage. The Tax Administration will ask you to show the receipts if needed.

How to claim the deductions for travel expenses on your tax return

If the category of income that your invoicing service pays you is wage income, claim your travel expenses as follows.

Deduction for the year 2021:

  • If you drive your own car, the deduction is €0.25 per kilometre.
  • If you ride your own bicycle, the deduction is €85 per year.
  • If you ride your own motorcycle, the deduction is €0.16 per kilometre.
  • If you ride your own moped, the deduction is €0.09 per kilometre.

Log in to MyTax to enter the deductible amounts under Travel and commuting expenses — Other than commute — Temporary business trips and travel in special sectors. Accordingly, please note that if you have done food courier work, you must not enter your work-related travel expenses under Commuting expenses. See the instructions: How to file deductions in MyTax

Alternatively, you can claim the deductions on a paper form, submitting Form 1D – Travel, deductible as expenses for the production of income.

It may be that your invoicing service has paid you tax-exempt reimbursement for travel expenses during the year. In that case, you cannot claim deductions anymore.

If the category of income that your invoicing service pays you is trade income, your travel expenses are “Expenses for the production of other income than wage income”. In the same way as above, the tax-deduction depends on the means of transportation, as follows.

Deduction for the year 2021:

  • If you drive your own car, the deduction is €0.25 per kilometre.
  • If you ride your own bicycle, the deduction is €85 per year.
  • If you ride your own motorcycle, the deduction is €0.16 per kilometre.
  • If you ride your own moped, the deduction is €0.09 per kilometre.

Log in to MyTax to enter the deductible amounts under Expenses for the production of income — Expenses for the production of income other than wages and salary — Expenses for the production of other income. See the instructions: How to file deductions in MyTax

Alternatively, submit Form 50A – Earned income and deductions on paper. Enter the travel expenses in the paper form’s section 8.5 — Expenses incurred in acquiring or maintaining income other than wages and salary.

How to claim other deductions on your tax return

You can deduct still other work-related expenses in your taxation as expenses for the production of income. The expenses in this category include

  • The fees you have paid to the invoicing service during the year.
  • The invoicing service can have charged you an employer's health insurance contribution. The contribution is deductible.
  • The part of your telephone costs directly connected to your work.
  • The expenses you paid for any tools you had to use for work.

If related to wages, you must enter the expenses for the production of income in

Expenses relating to trade income must be reported in

  • MyTax under Expenses for the production of income — Expenses for the production of income other than wages and salary — Expenses for the production of other income. See instructions: How to file deductions in MyTax
  • Alternatively, submit Form 50A – Earned income and deductions on paper. Enter the travel expenses into the paper form’s section 8.5 — Expenses incurred in acquiring or maintaining income other than wages and salary.

Have you paid YEL pension contributions?

You can also deduct the YEL contributions – pension insurance for the self-employed – if you have paid them during the year.

If you have no Business ID (Y-tunnus) i.e. no registration of your self-employment as an entrepreneur’s operation, claim the YEL deductions as follows:

For more information about the pension insurance contract for the self-employed, visit the website of the Finnish Centre for Pensions.

You can enter data for upcoming tax deductions when you ask for a tax card

Already at the stage when you submit an application for a tax card for wages or trade income, you can inform the Tax Administration of various deductible expenses.

Please note that only the expenses for the production of wage income appear on your pre-completed tax return automatically. You will receive the pre-completed tax return after the calendar year has ended, in springtime. For this reason, it is important to check that the tax deductions on the pre-completed tax return are correct. Make sure that no deductible expenses are missing.

Because only the expenses related to wage income appear automatically, you must report the expenses for the production of your trade income again when you receive the pre-completed tax return.

Read more about tax cards issued to the self-employed involved in “light” entrepreneurship

Example: René is doing food courier work. He drives his own motor vehicle to deliver orders to the customers’ homes. The invoicing service firm pays him. René has a contract with the invoicing service. The invoicing service pays him wages. René has not received any tax-exempt reimbursement for his travel expenses.

Because he drives his own vehicle and has a contract with an invoicing service, René has paid both travel expenses and fees to the invoicing service. He has the right to tax-deductions for his direct expenses related to the food courier work. They are expenses for the production of income. He has a logbook where he enters the deliveries and the kilometres. The logbook shows his tax-deductible kilometres per year. Every time after René has paid a fee to the invoicing service company, he places the receipt in storage. His smartphone has a food courier’s app that René must use at his work. He has the right to tax-deductions only for the part of his telephone costs related to the courier work.

In 2021, the total kilometres of food courier work amounted to 4,000, so the amount of euros to deduct is: 4,000km × €0.25 = €1,000. Because the above goes over the threshold of €750 (the automatic amount of deduction due to work-related costs, granted to everyone), René has the right to claim a higher deduction that covers the actual expenses for the production of his income.

He can log in to MyTax to enter data as follows: the above travel expense of €1,000 goes under Travel and commuting expenses — Other than commute – Temporary business trips and travel in special sectors. The paid fees to the invoicing service and the work-related part of the phone costs go under Expenses for the production of income — Expenses for the production of wage income.