The importance of a driving log and its maintenance may seem routine, but they hold significant significance for a company's operations and taxation. Keeping a driving log is a crucial part of managing a company's finances and taxes. It reliably helps determine how much of the driving done with company vehicles is for business purposes and how much is for personal use. A correctly filled driving log allows for accurate mileage reimbursement and expense claims while ensuring the necessary documentation for tax authorities. Whether your choice is paper-based, electronic, or another method, meticulous maintenance of a driving log is essential for your company's financial transparency and tax compliance.
Purpose of a driving log
A driving log is an essential tool for maintaining documentation of trips made using company vehicles. It helps track the portion of driven kilometers that are for business purposes and personal use. This information is necessary to meet the requirements of the Tax Administration and determine the correct taxes and reimbursements.
Filling out the driving log
A driving log can be maintained in various ways, either traditionally on paper, using a specific form, with spreadsheet software, or through an electronic service. For example, the UKKO Entrepreneur service offers its users an easy-to-use electronic driving log, enabling the quick and effortless recording of the kilometers driven.
Key information in the driving Log
The driving log is informal, but for each work-related trip, it is crucial to record the following details:
- Start and end times of the trip: Note when the journey began and ended.
- Start and end locations, as well as the route taken if necessary: Record where the trip started and ended and, if needed, describe the route taken.
- Meter reading at the start and end of the trip: Record the car's meter readings at the beginning and end of each trip.
- Distance traveled: Calculate the trip's distance, typically based on the meter readings.
- Purpose of the trip: Indicate why the trip was made, whether it was a business trip or personal use.
- Driver of the vehicle: If multiple people use the same vehicle, record each person's trips separately.
It's essential to note that, in line with the tax authorities' requirements, driving logs must be kept for six years from the end of the fiscal year. This underscores the need to maintain the driving log carefully and in a timely manner to ensure proper documentation and error-free information.
Commutes and their calculation
Filling out the driving log is also related to defining commutes. The general rule is that travel between your home and your workplace is not considered a work-related trip. Instead, journeys from home to a customer's office or any non-regular workplace are counted as work-related trips.