Circular on reimbursement for driving your own car

1. Introduction
   1. External rules to which SDU is subject
   2. SDU’s rules regarding missions
   3. Driving permit
2. SDU employees and non-employees who drive in privately owned vehicles
3. Business travel, cf. the Danish Tax Assessment Act § 9 B
4. Driving between the place of residence and main workplace
   1. Introduction to chapters 4 - 7
   2. Employees at SDU
   3. Primary income recipients not employed at SDU
5. Journeys between the place of residence and somewhere that is not the main workplace
   1. Basic principle
   2. 60-day rule in Danish Tax Assessment Act § 9 B
   3. Business travel when the employee usually drives to the main workplace in privately owned vehicle
   4. Business travel when the employee does not usually drive to the main workplace in privately owned vehicle
   5. Several journeys on the same day or during weekend work
   6. SDU’s verification of compliance with the 60-day rule
   7. Tax deduction for kilometres not reimbursed by SDU as a result of additional cost considerations
   8. Examples
6. Journeys that start or end at the main workplace
7. Journeys between two locations that are not the main workplace and/or place of residence
8. Settlement and rates for driving allowance
   1. Settlement for driving carried out
   2. Driving in Denmark
   3. Driving abroad
   4. Driving allowance rates
9. Driving must be carried out in privately owned vehicle
10. Lack of authorisation to drive privately owned vehicle
11. Administration
12. SDU’s obligation to carry out an inspection of the travel expense settlement
13. Consequences of non-compliance with rules in this circular
14. Definitions
    1. Authorised employee
15. Decision and entry into force

1.1 External rules to which SDU is subject

Missions at SDU are covered by the Danish Ministry of Finance’s circular on the mission agreement from 3 January 2023, which contains rules for the reimbursement of additional costs in connection with missions at home and abroad. The mission agreement has been concluded between the Danish Ministry of Finance and a number of professional organisations. See https://cirkulaere.medst.dk/cirkulaerer/001-23-cirkulaere-om-tjenesterejseaftalen/ (only available in Danish).

In addition, missions at SDU must comply with the tax rules in force at all times, including the provisions of the Danish Tax Assessment Act (in Danish: Ligningsloven).

The purpose of the mission agreement is to reimburse the additional costs incurred by an employee in connection with a mission according to section 2. Additional costs are solely construed as the extra costs imposed on the employee in connection with a mission. Only transport costs that are beyond the costs of the employee for transporting himself/herself in a vehicle between the place of residence and permanent workplace are considered to be additional costs when driving in a privately owned vehicle.

According to the mission agreement, financial compensation may not be given for inconveniences or the like in connection with, e.g. stressful travel.

Reference is also made to sections 3 and 4 of the mission agreement, which contain a definition of a mission and state that missions are organised by the place of employment.

Staff Administrative Guidance (PAV) published by the Medarbejder- og Kompetencestyrelsen also contains a number of rules regarding missions in chapter 21. See https://pav.medst.dk/Tjenesterejser (only available in Danish).

1.2 SDU’s rules regarding missions

SDU’s rules regarding missions are described in internal circulars that can be found at https://sdunet.dk/da/vaerktoejer/love_regler_aftaler/koersel/cirkrejser.

SDU travellers should use public transport in connection with a mission whenever possible.

The general rule may be waived if, on the whole, it is considered more appropriate and economical for the university to use privately owned vehicles. Consideration should also be given to using one of SDU’s official vehicles for the journey.

1.3 Driving permit

It is possible to use privately owned vehicles if the employee/traveller has received a driving permit from the nearest manager, who has been assigned a budget by a level 2 manager. The driving permit is documented by the authorised employee’s specification/approval of travel expenses.

A driving permit may be obtained for a permanent or specific journey. The employee will not be permitted to waive the general rule regarding travel with public transport for each mission if a permanent driving permit has been granted.

Reference is made to section 10, which concerns persons who have not received a driving permit but nevertheless drive in a privately owned vehicle.

A tax-free driving allowance may be paid to employees for business travel.

In this context, SDU disburses a tax-free driving allowance for business travel to persons who receive their primary income from SDU.

Persons who do not receive their primary income from SDU cannot receive a tax-free driving allowance. SDU reports driving allowance paid to persons who do not receive their primary income from SDU to the Danish Tax Agency as a taxable allowance.

The Danish Tax Assessment Act is a tax law. The Danish Tax Assessment Act § 9 B contains the following definition of business travel:

• a. Transport between the usual place of residence and workplace for up to 60 working days within the previous 12 months,
• b. transport between workplaces and
• c. transport within the same workplace.

All other driving is considered private.

4.1 Introduction to chapters 4 - 7

When calculating driving allowance, it is important to distinguish where the journey starts/ends in relation to whether it is the place of residence, the main workplace or a temporary workplace.

Chapter 4 describes driving between the place of residence and main workplace.

Reference is made to chapter 5 for journeys between the place of residence and somewhere that is not the main workplace.

Please refer to chapter 6 for journeys that start or end at the main workplace and where the place of residence is not included in the route driven.

Please refer to chapter 7 for journeys between two temporary workplaces, i.e. where neither the main workplace nor the place of residence are included.

4.2 Employees at SDU

All employees at SDU have a main workplace. The main workplace is defined as the place where the employee has the highest rate of employment.

SDU does not pay SDU employees driving allowance for journeys between the place of residence and main workplace.

In addition, SDU does not pay driving allowance for several trips made between the place of residence and main workplace on the same day, or for driving between the place of residence and main workplace during weekends.

Employees at SDU can deduct a tax credit for journeys between the place of residence and work according to the normal tax rules (with the exclusion of the first 24 kilometres per day).

4.3 Primary income recipients not employed at SDU

Primary income recipients from SDU who are not employed at SDU (do not have a letter of appointment from SDU) - e.g. examiners, assessors and lecturers - may receive tax-free driving allowance from the place of residence to the workplace at the choice of SDU.

5.1 Basic principle

It is a basic principle that SDU covers an employee’s additional costs for business travel concerning SDU. The basic principle entails that costs saved for journeys between the place of residence and main workplace must be reduced if the journey starts or ends at the place of residence.

5.2 60-day rule in Danish Tax Assessment Act § 9 B

According to § 9 B of the Danish Tax Assessment Act, tax-free driving allowance may only be paid for journeys from the place of residence to the same temporary workplace for up to 60 working days per 12 continuous months.

The Danish Tax Assessment Act defines driving to the same temporary workplace in a privately owned vehicle for more than 60 working days within a period of 12 months as private driving. The consequence of this is that SDU cannot pay tax-free driving allowance or that SDU must report the driving allowance to SKAT as taxable.

5.3 Business travel when the employee usually drives to the main workplace in privately owned vehicle

When a business trip for SDU starts or ends at the place of residence, the kilometres saved between the place of residence and main workplace must be reduced based on additional cost considerations.

However, if the business driving takes place on a day when teleworking (working from home / remote working / distance work) has been agreed between the employee and his/her manager, no reduction shall be made for saved private expenses for transportation between the place of residence and the main workplace. It must be stated in SDU's travel settlement system if the business driving has taken place on an agreed telework day.

However, no more than two single trips between the place of residence and main workplace should be reduced per day.

5.4 Business travel when the employee does not usually drive to the main workplace in privately owned vehicle

Employees who normally use another mode of transport than a privately owned vehicle between the place of residence and main workplace receive a driving allowance for business travel concerning SDU for the number of kilometres driven between the place of residence and temporary workplace. It must be stated in SDU's travel settlement system if the employee does not normally drive his/her own car between the place of residence and the main workplace.

5.5 Several journeys on the same day or during weekend work

SDU pays driving allowance for multiple journeys made on the same day between the place of residence and a place other than the main workplace.

SDU pays driving allowance for journeys made during the weekend between the place of residence and a place other than the main workplace.

According to the additional cost considerations, reductions can only be made for the first two single trips between the place of residence and main workplace per day.

5.6 SDU’s verification of compliance with the 60-day rule

As mentioned in sections 3 and 5.2, according to § 9 B of the Danish Tax Assessment Act, tax-free driving allowance may only be paid for journeys between the place of residence and the same temporary workplace for up to 60 working days per 12 continuous months.

Financial Services verifies compliance with this rule.

All units at SDU must, at the request of Financial Services, contribute to SDU performing the necessary verification.

A description of the verification procedure can be seen at sdunet.dk (only available in Danish), and SDU’s record system registers the names of employees that are verified in accordance with the 60-day rule.

5.7 Tax deduction for kilometres not reimbursed by SDU as a result of additional cost considerations

SDU’s employees may deduct tax credit for kilometres that are not reimbursed by SDU with reference to additional cost considerations (however, credit for the first 24 kilometres per day may not be deducted).

SDU refers to SKAT, e.g. https://skat.dk/skat.aspx?oid=2234761.

5.8 Examples

5.8.1 Example A

An employee lives in Aarhus and there are 150 km from his/her place of residence to his/her normal workplace at Campusvej 55 in Odense. One day, the employee has a full-day meeting at Campus Esbjerg instead and will not be working in Odense at all that day. The distance between Aarhus and Esbjerg is 163 km. The employee drives in his/her own car, both as usual to Odense and to the meeting in Esbjerg.

• The employee can be reimbursed for 26 km by SDU (2 x 13 km), provided that there are no problems in relation to the 60-day rule.
• The employee can deduct transport allowance for 276 km (2 x 150 km minus 24 km) at Danish Tax Agency.

5.8.2 Example B

An employee lives in Fredericia and there are 54 km from his/her place of residence to his/her normal workplace at Winsløwparken in Odense. One day, the employee has a full-day meeting at Campus Kolding instead and will not be working in Odense at all that day. The distance between Fredericia and Kolding is 24 km. The employee drives in his/her own car, both as usual to Odense and to the meeting in Kolding.

• The employee cannot be reimbursed by SDU, as he/she does not have any additional costs.
• The employee can deduct transport allowance for 24 km at Danish Tax Agency (a total of 48 km driving on the day in question minus the first 24 km, for which no deduction can be made).

5.8.3 Example C

An employee lives in Køge and there are 43 km from his/her place of residence to his/her normal workplace at SIF in Copenhagen. One day, the employee starts work at the office in Copenhagen then drives 66 km to participate in a meeting in Holbæk. From Holbæk, the employee drives 52 km to his/her place of residence in Køge. The employee drives in his/her own car, both as usual to Copenhagen and to the meeting in Holbæk. On the day in question, the employee drives a total of 161 km (43 + 66 + 52 km).

• The employee can be reimbursed for 75 km by SDU (161 - 43 - 43 km), provided that there are no problems in relation to the 60-day rule.
• The employee can deduct transport allowance for 62 km (161 - 75 - 24 km) at Danish Tax Agency.

5.8.4 Example D

And employee lives in Aarhus and his/her main workplace is at Campusvej in Odense. The employee usually travels between Aarhus and Odense by train. One day, the employee has a full-day meeting at Campus Esbjerg instead and will not be working in Odense at all that day. The employee drives in his/her own car from Aarhus to Esbjerg. There is a distance of 163 km.

• The employee can be reimbursed for 2 x 163 km by SDU, provided that there are no problems in relation to the 60-day rule.
• The employee cannot deduct transport allowance at Danish Tax Agency.

5.8.5 Other examples

Section 21.2.11 of Staff Administrative Guidance (PAV) contains several examples of additional costs when driving in privately owned vehicles. See https://pav.medst.dk/Tjenesterejser/Afgraensninger-definitioner-og-saerlige-bestem/Laengde-og-varighed.

SDU pays travel allowance for business travel that starts at the main workplace and does not end at the place of residence.

SDU pays travel allowance for business travel that does not start at the place of residence and ends at the main workplace.

SDU pays travel allowance for business travel between two locations (temporary workplaces) that do not include either the place of residence or main workplace.

8.1 Settlement for driving carried out

Settlement for driving must be made for the actual driving that has been carried out. For example, the main workplace may not be stated as the point of departure/destination if the driving started or stopped at the place of residence.

8.2 Driving in Denmark

If a permit for driving in a privately owned vehicle is available, SDU will pay the following allowance for driving in Denmark:

• The first 2,000 km per calendar year are reimbursed at the low rate.
• The next 18,000 km per calendar year (i.e. kilometre No. 2,001 to kilometre No. 20,000) are reimbursed at the high rate.
• Kilometre No. 20,001 and all subsequent kilometres in the calendar year are reimbursed at the low rate.

See section 10 if a permit for driving in a privately owned vehicle has not been granted.

8.3 Driving abroad

All driving abroad - including to and from Europa-Universität Flensburg - is always reimbursed at the low rate.

8.4. Driving allowance rates

The current rates for driving in a privately owned vehicle can be found at sdunet.dk.

In order for the driving allowance to be paid tax-free, driving must be carried out in a car/motorcycle owned by the driver/driver’s partner.

It is also required that the traveller or his/her partner has defrayed the costs of the vehicle and its operation themselves. Therefore, a tax-free allowance cannot be paid for driving in a vehicle that is made available by another employer as a free vehicle.

The registration number of the vehicle must be entered on the travel expense settlement form in order to verify compliance with these rules.

The SDU employee - who is to receive the mileage allowance - must always be in the car himself/herself in order for tax-free mileage allowance to be paid. SDU may not, for example, pay compensation for driving where the employee's spouse drives the car back to the place of residence after the SDU employee has been dropped off at the airport or railway station. This is stated in a bindende svar (binding response) from the Danish Tax Agency, which SDU received on 29 September 2023.

The following applies to employees who drive in a privately owned vehicle but lack the authorisation to drive a privately owned vehicle, cf. section 1.3 above, and will therefore only be reimbursed with costs corresponding to a train ticket:

1. The amount of expenditure must be reported on SDU’s travel expense settlement system to ensure that the allowance paid for driving in a privately owned vehicle is properly reported to the Danish Tax Agency.
2. A description of the practical procedure for the travel expense settlement system can be found at sdunet.dk.
3. The electronic travel expense settlement system must show - directly or indirectly - that no more kilometres are reimbursed than the employee would have received in accordance with sections 4-7 above.
4. The electronic travel expense settlement system must show - directly or indirectly - that no more kilometres are reimbursed than have actually been driven.
5. All other rules in this internal circular - including documentation requirements in particular - must be complied with.

All travel by SDU's employees must be settled via SDU's electronic travel expense settlement system.

At least one line for each day of driving must be entered in the expense settlement system when completing the electronic settlement.

Driving for a period listed in another file format, such as PDF, Excel or Word, which is uploaded to the travel expense settlement system, may not be gathered on one line (e.g. "Miscellaneous driving in the month of September").

Detailed information about the point of departure and destination of the journey must be provided when completing the travel expense settlement. Any intermediate points - if a colleague was picked up, for example - must also be provided.

The following information must be registered on the travel expense settlement:

1. Name of employee, address and CPR No. (date of birth if no CPR No. is available)
2. Purpose of the journey
3. The point of departure and destination of the journey, as well as any intermediate points:
   • The point of departure and destination can be described by entering, e.g., “Residence” or the name of the person, company that was visited.
   • Street name and house number
   • Postcode and town
4. Date
5. The number of kilometres driven
6. The kilometre rate used
7. Calculation of driving allowance (number of kilometres x rate)
8. Registration number of the vehicle used
9. Electronic signature of the traveller

SDU employees must complete the travel expense settlement for driving in a privately owned vehicle at least once a month, i.e. travel for more than one month may not be gathered.

The travel expense settlement for driving in a privately owned vehicle must be completed at least once a month for the following reasons:

• SDU must verify compliance with the 60-day rule.
• It is necessary to register costs on a regular basis in order to ensure accurate financial management at SDU.
• It is difficult for SDU to document that we have had the necessary knowledge of the business travel if settlement is not made on a regular basis.
• There must be an appropriate distribution of work in the decentralised units and Travel Office throughout the year.

Due to tax legislation, SDU has an obligation to carry out an inspection of travel expense settlements.

In addition, SDU’s general requirements for the approval of expenses must be observed.

The approver (the authorised employee) declares the following when approving the travel expense settlement:

• That the driving has taken place
• That accurate information of the route driven has been provided, cf. section 11
• That the registration number of the vehicle used has been provided
• That the unit will pay the costs

Non-compliance with the rules in this circular may have the following consequences:

• The employee may be eligible to pay tax for the driving allowance paid.
• SDU may be fined for non-compliance with tax legislation.
• The Danish Tax Agency may demand that SDU be jointly and severally liable for the non-deducted tax at source if the employee is eligible to pay tax for the driving allowance paid.

14.1 Authorised employee

The following employees at SDU are considered authorized employees:

• A manager at management level 1 or 2, cf. section 2.2 in SDU’s accounting guidelines (i.e. member of Executive Board, faculty secretary, head of department or head of division in the Central Administration).
• An employee who is authorized by a manager at management level 1 or 2 to be an improver of travel expenses.

This internal circular entered into force on 23rd April 2018. The Rectorate at SDU adopted the circular on 12th April 2018.

The circular was last amended by the Rectorate of SDU on 9 October 2023. The latest amendment is an addition to point 9 concerning mileage allowance, where the recipient is not present in the car.