When an employee travels for work such as commuting and client visits the employer can reimburse expenses for these travels. This can be done in different ways which we will explain in this blog item.
Expenses made by the employee for (business) travel with public transport may be reimbursed tax free (this remains the same under the work cost ruling effective as of 2015). With your administration you must keep proof of costs such as copies of the tickets or a transaction overview of the OV-chipcard. As an employer you can also choose to reimburse € 0,19 per kilometre instead of the actual expenses for public transport.
When an employee travels with own transportation from home to work or for example to a client the employer can reimburse € 0,19 per kilometre tax free (this remains the same under the work cost ruling effective as of 2015). It doesn’t matter which way of transportation the employee uses. If you want to reimburse more than € 0,19 per kilometre the difference needs to be taxed or this can be included in the ‘free space’ under the work cost ruling.
The tax free reimbursement of € 0,19 per kilometer doesn’t apply for:
For communting you can reimburse a fixed allowance based on the rules as given by the tax authorities. The most used method is as follows:
(number of kilometres one way * 2) * € 0,19 * 214 working days / 12 months * parttimepercentage = untaxed fixed travel allowance per month
For the calculation of a fixed travel allowance we use 214 working days in a year. Vacation, national holidays and sickness are then already taken into account. In case of absence of the employee, for example due to sickness, the travel allowance can be paid for another 6 weeks and then needs to be stopped.
You must keep records of the travel expenses in your administration. In order to register the reimbursement of € 0,19 per kilometre for incidental trips it’s recommend to note the route travelled per trip and the visited address.
As an employer you can, under conditions, provide or reimburse a bicycle to your employees. As a condition the employee must use the bicycle for commuting for more than half of the working days that he travels to work. The costs of the bicycle can be reimbursed tax free up to € 749 and there is also an option to reimburse accessories and an insurance tax free.
When an employee makes parking expenses with a company car these are seen as intermediary costs and can be reimbursed tax free. However this is different when an employee makes parking expenses with his private car. When the employer reimburses € 0,19 per kilometre parking expenses are deemed to be included in this reimbursement. When an employee declares parking expenses, for example for a client visit, the parking expenses are taxable and need to be included in the payroll with a final levy. Reimbursing parking expenses or permit at the home of the employee should be taxed in the payroll.
When you provide a company car to your employee this is seen as wage in kind when the employee uses this car also for private purposes. Private use is the case when there are more than 500 private kilometres in a calendar year. With private use of an employee a fiscal addition needs to be added to the payroll and the employee pays tax on this fiscal addition. The height of this fiscal addition depends on the value of the car, the CO2 exhaust of the car and the admission date of the car. The fiscal addition percentages vary from 0% to 25% and for cars older than 15 years different rules apply (economic value) and the percentage is 35%. When you are not sure what applies you can let us know the license plate number and we can check the details with the Dutch RDW administration. Please note that for delivery vans other rules apply.
If your employees informs you that he will not use the company car for private purposes the employee can apply for a ‘Declaration no private use’ with the Dutch tax authorities. You must keep this declaration with your administration and no fiscal addition needs to be calculated in the payroll. The declaration is valid for a full calendar year so it’s not possible to change halfway during a year. You must however always inform us when a company car is provided as we need to report the company car in the monthly payroll tax return in all cases. In addition to this the employee must keep a travel administration and that can be done in different ways such as with a black box. Due to the ‘Declaration no private use company car’ you as the employer will not receive an assessment if afterwards it turns out that the employees did use the car for private purposes and wrongfully applied for the declaration. In such as case the employee will receive an assessment through income tax. When an employee changes cars he must inform the taks authorities with a change form of the new license plate number. If the employees chooses the use the car privately he needs to get the declaration revoked. You must however always inform us when a company car is provided as we need to report the company car in the monthly payroll tax return in all cases.
Questions about travel expenses and company cars? Contact WePayPeople via +31 (0)20 820 1560 or email [email protected].
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