As from tomorrow, 1 July 2020, the maximum amount of the fixed mileage compensation will be set at EUR 0.3542 per kilometer. This is a decrease of the amount, which is EUR 0.3653 until 30 June 2020.
This fixed amount can be granted to an employee who uses his own vehicle (car, motorcycle or moped) to travel for his employer or for his home-work travel. For tax purposes, travel between the place of residence and the fixed place of work cannot be considered as a professional travel and hence cannot be regarded as "travel on behalf of the employer".
From a tax perspective, this mileage compensation is considered as a non-taxable reimbursement of costs proper to the employer for professional travel. This mileage compensation is exempt from taxes up to an amount of EUR 410 per annum (amount for income year 2020). The balance is taxable income which is taxed against the progressive tax rates, like ordinary remuneration.
In the event the employer would grant a higher compensation, the difference will possibly be regarded upon as a taxable benefit.
From a social security perspective, this payment by the employer is not regarded as remuneration since it is a cost that is at charge of the employer. Therefore, it is exempted from social security contributions, both for professional travel and home-work travel. As a rule, the National Social Security Office takes the same amounts into account as those provided by tax legislation.
The new amount applies from 1 July 2020 until 30 June 2021.
