The purpose of the driving log is to separate business and private driving. A company should keep a driving log for all its vehicles. Vehicles that have been VAT deductible should only be used for business purposes. A vehicle can also be counted as a company asset only if more than half of the annual kilometres driven are business purposes.
The tax authority may request an explanation from the company about the journeys made by the vehicle. If the explanation cannot be provided or the explanation provided is incomplete, the tax authority will estimate the number of private and work journeys made by the vehicle. If unreported private journeys are made using company cars, this is tax fraud, which can be costly for both the employee and the employer. In this case, the employee is considered to receive a car benefit. The employee must pay the car benefit retroactively to the tax authority. The tax authority will also require the entrepreneur to return the deductions.
Tax authorities' requirements for driving logbook information
The driving log is free-form, but the tax authorities require the following information to be recorded for work trips:
- start and end time of the ride
- start and end point of the ride and possibly the route
- odometer reading at the beginning and end of the trip
- length of trip
- purpose of driving
- car user
Driving logs must be kept in the company's accounting records for at least 6 years.
The driving log can be used to pay mileage reimbursements. The employer can pay mileage reimbursements tax-free for the use of their own car. The driving log allows the employee to easily check the kilometers driven if necessary.
Read more on the tax authorities' website.
Electronic driving logbook – driving records automatically
With our electronic driving tracking service, keeping a driving log is easy and hassle-free. Filling out the driving log is automatic and does not require any working hours from the employee. The data is immediately transferred to our cloud service, from which it is easy to produce the necessary tax-approved reports. The trackers we use, made in Finland, are very reliable and work even in extreme cold.
Vehicles are often a company's most valuable asset. With our vehicle tracking service, the company knows where its fleet is. GPS tracking also provides security in the event of theft.