How to withdraw money from a company without taxes?

Withdrawing money from a company tax-free can be done in several ways. Many entrepreneurs do not take advantage of the various tax benefits offered by the state simply because they are not aware of them. In fact, there are several expenses that are tax-free for companies, and the entrepreneur can confidently compensate themselves as a board member and/or employee as an individual. Here are all the possible ways listed.

Personal Car Use Compensation

The company can compensate for the use of a personal car for business trips tax-free up to €335 per month, but only based on the travel log. If more is paid, it is taxed as a salary. If the company has made payments to an individual for car use over the year, it is required to file a declaration INF 14 by February 1 of the following year.

Home Office Expenses

If you are working from home and there is a separate room for an office, all office expenses can be accounted for as 100% company expenses. If there is no separate room, expenses are shared proportionally with the rest of the home expenses. The usual distribution is up to 50/50. Utility costs, part of the rent if it is paid, and all necessary office supplies can be compensated. Home office expenses are compensated based on the decision of the board and the expense document.

Training Expenses

Expenses related to training for work duties (as well as books, webinars, consultations, conferences) are tax-free provided that there is a direct need for the training in the company and/or it is necessary for the employee to perform their job. Such educational events and other methods can be accounted for as tax-free company expenses, whether for an employee, official, board member, or the manager of a non-resident's permanent establishment.

Daily Allowances and Other Related Costs for Business Trips

The employer can send an employee (including a board member) to perform work tasks outside the workplace specified in the employment contract. The business trip cannot last more than 30 days unless a longer period has been agreed upon. For the trip, the company pays daily allowances, for the first 15 days, it can be €50 per day, then €32 per day. Daily allowances are tax-free. Other related costs such as accommodation, flight tickets, and expenses for participating in fairs/conferences are also paid by the company. All costs are compensated based on the supporting document, and for paying daily allowances and reimbursing expenses, a business trip order and expense report are prepared.

Health Promotion Expenses

Expenses for health promotion, such as health and sports expenses, are tax-free and compensated up to €100 per employee per quarter. This applies to employees under employment contracts, board members, officials, contractors under the Law of Obligations Act, and sole proprietors who sell goods to the employer over a long period. The €100 is calculated including VAT, and the basis for payment is the expense document. Health promotion expenses can compensate for participation fees in mass sports events, direct costs associated with regular use of sports and movement facilities, insurance premiums for health insurance policies, and services of a rehabilitation doctor, physiotherapist, clinical speech therapist, or psychologist, provided they are performed by a qualified specialist. Paid subsidies should be declared in the INF 14 part 3 declaration of the following year.

Hospitality Expenses

Hospitality expenses include company expenses for catering, accommodation, transport, or entertainment of guests or partners. However, the tax-free maximum is 2% of the total payments subject to social tax plus €32 per month.

For example, if the company's monthly payroll fund is €3000, the maximum tax-free hospitality expense amount per month is 3000 x 0.02 + €32, which equals €92. If such expenses are not incurred every month, one large reception can be organized at the end of the year, and the unused benefits can be summed up. Hospitality expenses are declared in Appendix 5 to the TSD.

(Advertising) Gifts

The tax-free limit for gifts made for advertising purposes is €10 excluding VAT. If the gift's cost exceeds this, for example, €11 + VAT, then a fringe benefit tax of 20/80 must be paid, which is €3.30. Expenses for advertising gifts are declared in Appendix 5 to the TSD.

Withdrawing money from a company can be done in several ways. If you have any questions, contact us!