Since March last year, the urgent advice from the government has been to work at home as much as possible. As a result, employees travel much less to their workplace at the employer’s. Some have even completely ceased to commute. Employers may reimburse commuting expenses tax-free up to an amount of EUR 0.19 per kilometre. Many employers choose to grant their employees a fixed travel allowance for their commute. This is beneficial for most employers due to the fact that they do not have to verify who commuted when and how high the reimbursement should be for that employee. This fixed travel allowance may also be applied if the employee occasionally works from home, provided that the employee travels at least 128 days per year to his or her workplace with the employer (click here for the relevant article of law (in Dutch)).
As a result of this compulsory working from home, in many cases the fixed travel allowance may no longer be provided tax free. In order to accommodate the employer in this respect, the government has approved that, for the period 2020, an employer does not have to attach consequences to a change in the employee’s travel pattern for the fixed travel allowance. Until the end of 2020, the employer was allowed to continue to take the facts on which the untaxed fixed travel allowance was based as its premiss (see the Policy Decree on tax concessions in response to the corona (Covid-19) crisis (in Dutch)). This period was then extended to 1 February 2021 and again extended to 1 April 2021 (in Dutch).
Today, the State Secretary for Finance (Taxation and Tax Administration) announced by letter to the House of Representatives that this period will be extended once again, until 1 July 2021 (click here for the letter to the House of Representatives (in Dutch)).
The condition remains, as in the previous extensions, that it concerns a fixed allowance already granted by the employer prior to 13 March 2020. For employees with a fixed travel allowance agreed after this date, the exception does not apply.
Incidentally, the employer is not legally obliged to continue paying the fixed travel allowance if the employee no longer incurs these expenses. Whether the employer is obliged to do so, depends on what has been agreed with the employee in for example the (collective) labour agreement, personnel handbook, employment conditions regulation or other regulation. And how this has been dealt with under Covid-19 until now.
We will be happy to assist you in mapping out the possibilities regarding the travel allowance and any changes to it.