Business trips in Ukraine 2026: which expenses are not taxed as income

Business trip expenses reimbursed to an employee or to a member of a governing body are not included in that person’s taxable income in Ukraine, within actual costs, if they are supported by documents showing their cost and there is evidence that the trip is linked to the organisation’s activity. This covers travel, accommodation, visas, mandatory insurance and other documented costs of entry and stay. Alcohol, tobacco, most tips and entertainment are taxable.

The State Tax Service (STS) office for Ivano-Frankivsk region published a reminder of these rules on 15 September 2026. For NGOs and foundations the topic is sensitive in two ways: trips are often funded by a donor, and it is not only employees who travel but also board members. Below we explain which expenses, apart from per diems, are not income, which documents are needed and what the auditor looks for in expense reports. We wrote about staff costs in grants generally in our article staff costs in a donor project.

What has changed

There are no new rules; the tax authority reminded the existing rules of the Tax Code (if.tax.gov.ua, publication of 15.09.2026). The key points are as follows.

• Money received for a business trip or as an accountable advance is not included in total taxable income.
• Business trip expenses reimbursed in the established manner, within actual costs, are not income for a person who is employed by the employer or is a member of the governing bodies of an enterprise, institution or organisation.
• The actual number of days of the trip is determined by the business trip order, provided there is one or more documentary proof of presence: border stamps, travel documents, accommodation invoices or other documents.
• The expenses are not subject to personal income tax (PIT) only if there are supporting documents certifying their cost.

Who is affected

• employees who have an employment relationship with the organisation;
• members of governing bodies of enterprises, institutions and organisations: for an NGO this includes board members travelling on the organisation’s business;
• accountants who accept expense reports and decide what part of a reimbursement is income;
• finance managers of donor projects in which trips are funded from the grant.

Separately, the STS mentions foreign currency compensation paid to diplomatic service staff on long-term assignments: it is also not included in taxable income.

Which expenses are not income

According to the clarification, the following are not taxed within actual costs:

• travel to the destination and back and at the destination, including by rented transport, baggage and ticket booking;
• accommodation in hotels and motels, and meals or personal services included in the bill (laundry, cleaning, repair and ironing of clothes, shoes or linen);
• rent of other accommodation;
• telephone calls;
• passports for travel abroad and visas;
• mandatory insurance and other documented costs related to entry and stay rules, including any fees and taxes payable on these costs;
• life, health or civil liability insurance, if it is mandatory under the laws of the destination or transit countries.

What to do and by when

1. Issue an order for every trip. The order, together with documents on presence, determines the actual number of days.
2. Collect documents on cost. Tickets, hotel invoices, insurance policies, bank statements, documents on payment instrument transactions. Without them the expense becomes income.
3. Keep evidence of the link to the activity. An invitation from the host party, a contract, documents showing an intention to enter into civil-law relations, evidence of participation in negotiations, conferences or symposia on topics of the organisation’s activity.
4. Separate personal items. Do not reimburse alcohol, tobacco, tips outside the bill or entertainment as business trip expenses, or include them in income.
5. Prepare translations. At the tax authority’s request, the employer provides a translation of supporting documents in a foreign language at its own expense. For trips abroad it is better to do this straight away.

Common mistakes and risks

• A trip without an order. There are tickets, but no order, and nothing confirms the number of days.
• No link to the activity. The tax authority lists the evidence of such a link explicitly. Without an invitation, an event programme or a contract, the trip is hard to explain to both the tax authority and the donor.
• A hotel bill with the minibar. Alcohol on the bill is included in income, even if everything was paid as one amount.
• A board member without an employment contract. The rule also covers members of governing bodies, so reimbursing their travel on the organisation’s business may not be income, but only with the same documents.
• Foreign language documents without translation. The employer pays for translation at the tax authority’s request, and during the tight timeline of a tax audit this is difficult.

In a project audit, the auditor usually selects several expense reports and checks the order, cost documents, the event programme and the link to project objectives. An incomplete set means a risk of both additional tax and the donor disallowing the cost.

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How we help

We keep the books and run payroll for companies and NGOs, review business trip expense reports and prepare documents for project audits. See payroll outsourcing, NGO accounting and grant audit. We also cover documenting project costs in our free webinars for NGOs. You can reach us via contacts.

Prepared by the MK Audit team