How to prepare a business travel order for expense reporting purposes in Russia
When a company in Russia sends and employee on a business trip the first item to do is to prepare an order for the business trip. The idea is that the managment orders an employee to work outside the city where the main employement relationship is and this is to be documented for this individual employee. Only employees in a full labor relationship with the company can be send on a business trip, freelancers and consultants of third parties not. During the business trip the employee continues his normal work relationship with the company, is just somewhere else. The business trip can last any defined timeperiod. For employees who have in their job description and other documents the task to do travelling are treated by law differently in Russia.
The concept of business trip order is
fundamentally different in Russian accounting than from western accounting concepts and accounting legislation.
A comparable to the business trip orders does not exist in western accounting and tax legislation. The business trip order concept is taken from earlier accounting and documentation rules in the CIS countries.
The business trip order has two main functions. First the document provides the basis for the business trip with its attached expense report and other costs. Second the document creates the basis to deduct the expenses from the taxable base. Tax inspectors in Russia may reject the lowering of the taxable based due to the incurred expenses due to the wording in the business trip order or due to he documented expenses. If they do not agree that the purpose of the business trip was to increase the profits of the company and they taxable base they might decline the tax deduction.
As the practice shows the Chief Accountant points out in the business trip order sometimes not the real purpose but a purpose more acceptable to a tax inspector. E.g. a trip to another country to present at a Chamber of Commerce might be reformulated into a client visit in this country.
From the business trip order the days for the per diem calculation are take, if there are deviations there is more work.
Prior to 1 January 2015 also an additional docment needed to be produced. A docoument confirming that the employee visited the conterparty with a stamp and signature by the counterparty visited. To read more about the topic please click here (link to be added) .
It should be noted that maybe in the future to simplify the accounting process the business trip order document might be also dropped.
Employees who by law can not be send in Russia on a business trip
- Minors who are less than 18 years
- Employees who have young kids below 3 years at home
- Employees who are interns or in a apprenteship program, except if the business trip is integral part fo this education
- Employees who have children with an invalid status
- Employee who are the main care providers for seriously ill family members as documented with the relevant medical documents
- Single mothers or fathers who are raising a kid with less than 5 years of age
- Сотрудники-опекуны детей несовершеннолетнего возраста.
The type of persons on above list can only be send on a business trip with the written consent of the employee. It is totally forbidden to send pregnant women on a business trip.
The business travel order form
The business trip order in Russia needs to contain the the following data:
- Legal name of the company
- Date of the preparation of the order and its number
- Personal data of the employee send on the business trip
- Employee number of the employee send on the business trip
- Organization section where the employee is employeed in the company
- Full official job title without any abbreviation
- Destination of the business trip, if multiple destinations are included all should be listed in the business trip order
- The number of days for the business trip and the exact time of the beginning and ending of the business trip and the documentation of the planned transport format. The departure date is the time when the employee has left. If an employee returns after midnight then this is considered to be the next day. If an employee e.g. returns before midnight to a train station in his home city but is only after midnight at home this is considered to be the next day when calculating the per diems.Number of days of the trip and the exact date of its beginning and end. The date of start and end is the date of departure and arrival back to the vehicle (airplane, train, bus, and so on. D.), On which the employee will be touring. Day of departure or arrival should be considered in the current day when the vehicle arrived / has left up to 24 hours inclusive. If the arrival / departure is carried out between midnight and later, the day of departure or arrival should be considered the following day. This aspect must be kept in mind, since in such cases, the confusion occurs quite often. In addition, there are cases where the place of departure or arrival point (airport, station) is located outside the city limits. The time it takes an employee to get there, too, need to be taken into account when calculating dates
- The purpose of the business trip
- How the business trip is paid for
- Signature of the employee that he got acquainted with the business trip order
An example of the business trip order can be downloaded here.
The business trip order is a necessary document to send an employee on a business trip. 3 days after returning from a business trip the employee shall provide all the necessary information for the expense report.
Order on travel is one of the necessary documents when sending an employee on a business trip, after returning employee shall completed expense report (how to fill in a standard form AO-1 expense report can be viewed here: Link.