In the operations of every company there are almost always expenses that are paid in cash. There is nothing wrong with that — if the documentation is complete.
When a cash expense is recognised
For a cash expense to be accepted as deductible:
- In addition to the fiscal receipt, there must also be a cash invoice issued to your company
- Both documents together form the complete documentation for recognising VAT and the business expense
What happens without the cash invoice
If you have only a fiscal receipt, without a cash invoice:
- The expense is treated as an undocumented expense
- It is not recognised as a deductible expense for the corporate income tax base
- In practice: if you are in profit at the end of the year, you pay 9% tax on that amount
Are your travel orders complete?
Just as every company has expenses that are paid in cash, undoubtedly there are also business trips that incur costs. Such costs must be:
- Documented
- Provable
- Business-related
- Properly calculated
Only under these conditions can they be recognised as a business expense of the company.
Who is entitled to recognised business travel expenses
Recognised business travel expense is granted exclusively to employees of the company. Under no circumstances to the founders of the company who are not employed.
Mandatory items of the travel order
In addition to the basic items that every travel order must contain, a travel report is also required, stating and explaining the business purpose of the trip.
Basic items of a travel order:
- Number, place and date of the travel order
- Name and address of the company sending the employee
- Details of the means of transport
- Place of departure and destination
- Number of daily allowances and amount (depending on the country)
- Inclusion of meals in the daily allowance
Additional expenses during the trip — rules
- For trips within Montenegro — fiscal receipts must be accompanied by cash invoices issued to the company
- Expenses paid via bank transfer (most often airline tickets, hotel) — must be supported by a corresponding travel order justifying the business purpose. Without the order, the expense is treated as non-business related
Not sure whether your documentation for cash and travel expenses meets all requirements? Contact Finance Plus — avoid the risk of deductible expenses being reduced during a tax inspection.
