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In the Netherlands, the reimbursement of travel expenses by your employer is not required by law. However, most Dutch companies do offer reimbursement for business travel in their employment contracts. The agreements regarding the reimbursement of travel expenses are stated in the collective labour agreement, company regulations or your labour contract. In this blog, we will provide you with everything you need to know regarding travel expenses and travel allowance in the Netherlands.
When you travel by private transportation (car, motorcycle, bicycle or by foot) it is common to receive travel allowance per km. This tax-free travel allowance may not exceed the maximum of € 0,19 per kilometer. It does not matter if this is commuting or business related travel (e.g. transportation to a client or a business meeting).
The tax-free reimbursement of € 0,19 per kilometer doesn’t apply for:
For commuting your employer can reimburse a fixed allowance based on the regulations given by the tax authorities. The most used calculation method is as follows:
To calculate the fixed travel allowance the calculation uses 214 working days. Vacation, national holidays and sickness are already considered. In case of long-term absence of the employee, for example, due to sickness, the travel allowance can be paid for another six weeks. After this period of absence, the reimbursement needs to be stopped. If your employer wants to reimburse more than € 0,19 per kilometer, everything above € 0,19 per kilometer is wage and thus taxed accordingly.
Reimbursements for travel expenses your employer pays in addition to the € 0,19 per kilometer, will be labelled and taxed as salary. Which includes fees for parking, tolls, fees for (additional) depreciation of the car and extra fuel consumption by a trailer or vehicle damage.
Parking expenses with a company car are considered intermediary costs and therefore it is possible to reimburse them tax-free. This is only the case when it concerns parking expenses with a company car. This is different when you make parking expenses with a private car. When your employer reimburses € 0,19 per kilometer, parking expenses are deemed to be included in this reimbursement. When you (as an employee) declare parking expenses, the parking expenses are taxable. So, your employer needs to include them in the payroll with a final levy. The parking expenses (including parking permits) you make in order to park near your place of residence are also taxed in the payroll.
Please note that if you have a foreign driving licence, there are some rules regarding the validity of your driving license and changing it to a Dutch driving license. In our blog ‘Using your foreign driving license in the Netherlands’, you can read all you need to know about your foreign driving licence.
As of January 1, 2019, there are three categories regarding tax liability in the Netherlands:
When you are about to choose a new lease vehicle, it is important that you are aware of these tax categories.
If you, as an employee, are the owner of an electric car, your employer may give you travel allowance with a maximum of € 0,19 per kilometer. Reimbursements of electricity costs are not possible. The € 0,19 per kilometer should cover all the expenses.
But typically, electric cars are not owned by the employee but leased or owned by a company. Recharging the car at the work location will probably not cost the employee anything. However, depending on the situation, this may not be the case when the car is charging at home.
By public transport, we mean transport by bus, ferry, train or subway. So, public transport is not any transportation by taxi, boat or aircraft. These examples of transport are part of a separate arrangement, which we will discuss later in this blog.
If you are travelling by public transport in the Netherlands, you may receive a travel allowance with a maximum of € 0,19 per kilometer. And expenses made by the employee for business travel or commuting with public transport may be reimbursed tax-free. Your employer may also choose to pay the actual expenses. If your employer wants to do so, he/she must demonstrate your business travels by public transport in the Netherlands. For this reason, you will need to save copies of the tickets. It is possible to create a digital list of trips and costs incurred with the public transport card (OV-chipkaart). A copy of your monthly subscription will also do.
When the employer allows, it is possible to use your company car for private occasions, like holiday trips, groceries or family visits. When you drive over 500 private kilometers on an annual basis, the private use of company car will be considered as ‘salary of kind’.
Please note that if you have a foreign driving licence, there are some rules regarding the validity of your driving license and changing it to a Dutch driving license. Read in our blog ‘Using your foreign driving license in the Netherlands’ all you need to know about your foreign driving licence.
If you are travelling by taxi, boat or airplane, your employer may reimburse the actual expenses. For these types of transport, the maximum tax-free allowance is € 0,19 per kilometer. Any additional compensation will be labelled and taxed as salary.
Would you like to know more about travelling or travel allowance in the Netherlands? Or not sure about your travel allowance as an employee? Don’t hesitate to contact us, send us an email at email@example.com and we will answer any questions you might have.
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