At first glance, business travel may seem like a straightforward business event: an employee travels to a meeting, training course, conference, or another business assignment, submits the relevant receipts upon returning, and the employer reimburses the expenses incurred.

However, from an accounting and tax perspective, a single business trip involves a number of statutory and other prescribed rules. The duration and purpose of the trip must be properly recorded, entitlement to a per diem allowance must be determined, expenses covered by the per diem must be distinguished from those reimbursed separately, and reliable supporting documentation must be provided.

It is precisely these details that can lead to errors and potentially make an expense that should have been tax-free subject to tax scrutiny.

When is a trip considered business travel?

For tax purposes, domestic business travel is considered to be travel lasting up to 30 consecutive days for the purpose of performing tasks related to the employee’s position and the employer’s business activities.

Distance is also relevant when determining entitlement to a tax-free per diem allowance. The business travel destination must be at least 30 kilometres away from the employee’s place of work or place of residence or usual residence, provided that the other prescribed conditions are also met.

Therefore, not every business-related trip outside the office automatically qualifies as business travel for which an employee is entitled to a tax-free per diem allowance. Before calculating the allowance, the purpose, destination, duration, and circumstances of the specific trip must be established.

A travel order is more than an administrative formality

A travel order is one of the key documents used to demonstrate the business purpose of a trip and calculate the expenses incurred.

It must clearly link the person travelling with the business purpose of the trip, destination, departure and return times, means of transport used, and expenses incurred.

Once the trip has been completed, a final expense report must be prepared, reliable supporting documents must be attached, and a travel report must be completed. The report does not need to be extensive, but it should clearly state the purpose of the trip and what was accomplished during it.

It is also important to establish a clear link between the travel order and invoices or receipts for accommodation, transportation, tolls, parking, and other expenses. This documentation provides evidence that a particular expense was actually incurred for business purposes.

What is the per diem allowance in Croatia?

A per diem allowance is not additional salary for an employee, but compensation for certain expenses incurred during business travel.

For business travel within Croatia in 2026, up to EUR 30 as a full per diem allowance may be paid tax-free for a trip lasting more than 12 hours.

If the business trip lasts more than 8 but less than 12 hours, up to EUR 15, or half of the full per diem allowance, may be paid tax-free.

For business trips lasting several days, the total time spent travelling must be taken into account in order to correctly determine the number of per diem allowances.

It is also important to distinguish between an employee’s entitlement to a per diem allowance and the amount that may be paid without being subject to tax. The entitlement to a per diem allowance and its amount may be determined by a collective agreement, employment regulations, an employment contract, or another internal act of the employer, while tax regulations determine the maximum amount that may be paid tax-free.

Provided meals affect the amount of the per diem allowance

One of the common mistakes when preparing the final expense report is failing to take into account meals provided to the employee during the business trip.

If one meal, either lunch or dinner, is provided to the employee, the tax-free amount of the per diem allowance is reduced by 30%. If two meals are provided, the per diem allowance is reduced by 60%.

This is particularly important for conferences, seminars, and business events where lunch or dinner is already included in the registration fee.

Breakfast included in the price of accommodation is not considered a provided meal that would require a reduction of the per diem allowance.

For example, with a full domestic per diem allowance of EUR 30, one provided meal reduces the maximum tax-free amount to EUR 21, while two provided meals reduce it to EUR 12.

International business travel requires additional attention

For business travel outside Croatia, the calculation becomes somewhat more complex because the amount of the per diem allowance depends on the country to which the employee is travelling.

For example, under the applicable Decision on the Amount of Per Diem Allowances for Business Travel Abroad, the full per diem allowance is EUR 80 for Slovenia, EUR 80 for Italy, EUR 90 for Austria, and EUR 90 for Germany. For countries that are not specifically listed, the prescribed amount is USD 50.

However, looking only at the final destination is not sufficient. It is necessary to correctly determine how much time the employee spent abroad, whether they travelled through several countries, and how long they stayed in each of them.

When travelling by car, bus, or train, the time of crossing the national border is relevant for calculating the international portion of the trip. For air travel, specific rules apply regarding departure and arrival times, while separate rules also apply to travel by ship.

For this reason, international business travel is an area where even a few incorrectly recorded hours can affect the final calculation.

Using a private vehicle for business purposes

If an employee uses their own vehicle for business travel, they may, subject to the prescribed conditions, be reimbursed for the use of a private vehicle for business purposes at a rate of EUR 0.50 per kilometre travelled.

When calculating the reimbursement, it is important to properly record the route travelled, mileage, and vehicle details.

The reimbursement for using a private vehicle should not be confused with other travel expenses. Tolls, parking fees, tunnel charges, and similar justified expenses may constitute separate costs that must be supported by appropriate receipts or other reliable documentation.

Is a taxi a separate expense or part of the per diem allowance?

Here, it is important to distinguish between transportation to the business travel destination and transportation within the destination itself.

For example, an employee may land at an airport located outside the destination to which they have been sent and use a taxi from the airport to their destination. Such an expense may be associated with transportation as part of the business trip.

On the other hand, taxi or other local transportation within the destination to which the employee has already travelled is generally considered an expense that the per diem allowance is intended to cover.

Therefore, a taxi receipt alone is not sufficient to determine whether the expense may be reimbursed separately. It is necessary to establish where the journey started, where it ended, and how it was connected to the business trip.

What if a receipt is missing?

The travel order and accompanying documentation should together provide a clear audit trail of the business transaction.

Expenses for accommodation, tolls, parking, transportation tickets, and other costs must be supported by appropriate documentation proving that the expense was actually incurred and that it was connected to the business trip.

If a receipt is missing or the information on the receipt cannot be clearly linked to the business trip, it is necessary to determine whether another reliable document or appropriate information is available to substantiate the actual expense incurred.

This is precisely why employees should be familiar with the rules before travelling, rather than only after returning, when the accounting department may be left trying to reconstruct where they went, what they paid for, and why a particular receipt is missing.

Does a travel order have to be in paper form?

The digitalisation of business processes has also raised the question of electronic travel orders.

The appearance or format of the document alone is not decisive when assessing its reliability. What matters is that it contains the prescribed information, can be linked to the expenses incurred, and allows its content and authenticity to be subsequently verified.

Professional guidance also refers to an opinion of the Ministry of Finance according to which an electronically signed travel order may be considered reliable, provided that the requirements applicable to accounting documents and electronic signatures are met.

Digitalisation can therefore significantly simplify administration, but it does not eliminate the obligation to properly document the underlying business transaction.

The most costly mistakes often occur after returning from a business trip

A business trip does not end when the employee returns to the office.

This is when the part that is particularly important from an accounting perspective begins: reviewing the documentation, determining the actual duration of the trip, calculating per diem allowances, checking any meals provided, recording mileage and other expenses, and finally approving the expense report.

Problems arise when this process is reduced solely to collecting receipts.

A receipt may prove that something was paid for, but it does not necessarily prove that the expense was justified for business purposes. A well-organised travel order system must therefore establish a clear connection between the purpose of the trip, the employer’s approval, the expenses incurred, and the final expense report.

A properly prepared travel order protects both the employee and the employer

Properly recording business travel is more than an accounting formality. It enables employers to control costs and maintain adequate documentation, while ensuring that employees are correctly and promptly reimbursed for expenses incurred while performing work on behalf of the employer.

The safest approach is therefore to establish a clearly defined internal procedure: how business travel is approved, who issues the travel order, which documents the employee must retain, the deadline for submitting them, and who reviews and approves the final expense report.

This significantly reduces the possibility of errors, particularly in companies whose employees travel frequently.

Conclusion

When it comes to travel orders, details often determine whether the final calculation is correct. A difference of just a few hours, a provided lunch, a missing receipt, or an incorrectly recorded route can affect the tax treatment of an expense.

If you would like to improve your business travel procedures, review the calculation of per diem allowances and travel expenses, or ensure that your documentation complies with current tax and accounting  requirements, brandom is here to help.

Contact us to ensure that every business trip, from issuing the travel order to preparing the final expense report, is properly documented, calculated, and recorded.