When an employee uses his own car to travel in the framework of his employment (i.e. for professional purposes), the employer can reimburse him for the costs incurred.
It is not necessary to be able to prove the exact amount of these costs as the authorities have fixed a maximum lump sum per kilometre, which they accept as a cost proper to the employer. It follows that no taxes and social security contributions are payable for the mileage allowance if this maximum is not exceeded.
This amount is adjusted every year.
The new amount applicable from 1 July 2016 until 30 June 2017 equals € 0.3363 per kilometre.
The amount which was applicable from 1 July 2015 until 30 June 2016 equalled € 0.3412 per kilometre. Note that the new amount is lower than the previous amount.
An additional condition is that the number of kilometres per year should not be abnormally high (max. 24.000 kilometres per year). If the number of kilometres is higher, proof must be furnished.
This amount is the maximum amount. Employers can reimburse the driven kilometres at a lower rate without any discussion. A higher reimbursement is also possible, but in this case the burden of proof lies with the employer and the employee. They should be able to prove that the allowance granted is in line with the actual cost price. Contact your payroll provider or your tax consultant for more information.