What is the Expense reimbursement policy in Kosovo?

This article explains how employees can request reimbursement for business‑related expenses in Kosovo, including mileage, travel costs, per diems, documentation requirements, and tax treatment. Proper authorization and documentation are required for reimbursements to remain non‑taxable.

1. Travel & Mileage (Private Vehicle Use)

Official Mileage Rate

Kosovo has a government‑set mileage rate commonly used by employers:

• €0.30 per km – use of a private vehicle for business travel

When reimbursed at this rate and supported by documentation, mileage reimbursement is generally treated as non‑taxable.

Eligibility

• Applies only to approved business travel
• Commuting between home and the regular workplace is not reimbursable
• Travel must be authorized in advance to qualify for tax‑free treatment

Mileage Log Requirement

Employees must submit a trip log including:

• Date of travel
• Business purpose
• Start kilometre reading
• End kilometre reading
• Total kilometres driven

Mileage claimed must reflect actual business kilometres only.

2. Parking, Tolls & Road Charges

• Parking fees, tolls, and road charges must be claimed separately
• These costs are not included in the €0.30/km mileage rate
• Receipts are mandatory

Expenses without receipts may be rejected or treated as taxable income.

3. Business Travel Authorization & Limits

Kosovo does not impose statutory caps on business travel spending. However, employers typically apply internal policies, which may include:

• Maximum daily travel budgets
• Rules for using private vehicles
• Prior approval requirements

To remain reimbursable and non‑taxable, travel must be:

• Business‑related
• Reasonable
• Properly documented

4. Transportation & Accommodation

The following expenses may be reimbursed when incurred for business purposes and supported by documentation:

Transportation

• Air travel: Economy class expected unless otherwise approved
• Taxi / ride‑share: Allowed with receipt and business justification
• Bus / train: Tickets serve as valid documentation
• Rental cars:Allowed with prior approval
  • Rental invoice required
  • Fuel must be supported by receipts

Accommodation

• Hotel accommodation during business travel
• Invoice or receipt required

International Travel

• Must comply with Kosovo’s official per‑diem tables (see Section 7)

5. Invoicing & Documentation Requirements

To keep reimbursements non‑taxable and auditable, each expense must be supported by a receipt or invoice including:

• Vendor name
• Date
• Amount
• Description of goods or services
• VAT breakdown (if applicable)

For invoices, listing the company name is recommended, though not strictly mandatory by law.

6. Common Tax‑Free Reimbursable Expenses

When properly documented and business‑related, the following are generally reimbursable and non‑taxable:

• Mileage at €0.30/km
• Airfare and other transportation
• Hotel accommodation
• Parking and tolls
• Meals covered by per diem (not by actual meal receipts)
• Business supplies
• Training or certification fees related to work
• Communication and internet costs while traveling

7. Per Diems (Daily Allowances)

Kosovo maintains official per‑diem tables for domestic and international travel.

Tax Treatment

• Per diems paid within government rates are generally non‑taxable
• Amounts exceeding official rates may become taxable income

Important Rules

• Per diems are intended to cover meals and incidental expenses
• Double reimbursement is not allowed:
  • You cannot claim a per diem and submit meal receipts for the same period

8. Entertainment, Gifts & Hospitality

Business Entertainment

• Must be business‑related
• Receipts are mandatory
• Expenses must be reasonable

Gifts

• Large or high‑value gifts may be treated as a taxable benefit
• Alcohol and luxury gifts may be:
  • Non‑deductible for corporate tax purposes
  • Rejected for reimbursement

9. Non‑Reimbursable or Taxable Personal Expenses

The following are not considered business expenses in Kosovo and are generally:

• Not reimbursable tax‑free
• Treated as taxable benefits if reimbursed

Examples include:

• Gym memberships
• Yoga or fitness classes
• Spa or wellness services
• Personal medical expenses

10. VAT & Recordkeeping

VAT

• Standard VAT rate: 18%
• Reduced VAT rate: 8% (for certain goods/services)
• VAT treatment follows normal Kosovo VAT rules

Record Retention

• All expense documentation must be retained for at least 5 years
• Payroll and Finance verify that:
  • Mileage and per‑diem rules are followed
  • Documentation is complete

If reimbursements do not meet requirements, amounts may be treated as taxable income.