Fixed (travel) allowance no longer untaxed when working from home in 2021

The decree regarding fiscal measures in connection to the corona crisis was updated on 29 September 2020. In the new decree, the State Secretary of Finance approves for the 2020 tax year that a change in the taxpayer's travel pattern as a result of the corona crisis does not lead to a change in the amount of the travel deduction the employee can claim for the income tax.

In order to meet the conditions for the travel deduction and the calculation of the amount of the travel deduction, the travel pattern that would have taken place if the measures to combat the corona crisis had not taken place may be used.

Approval (travel) allowances will lapse as of 1 January 2021

The decree also states that the approval to allow fixed travel allowances and other fixed allowances to continue unchanged only applies to 2020. It will therefore expire on 1 January 2021.

The expiry of the tax approval in 2021 will affect you and your employees. The travel allowance is only tax-exempt insofar as the is still commuting or making business trips. So you will have to map out the travel pattern of your employees. If the full allowance continues to be paid, the excess is taxed. You can place the allowance in the discretionary margin of the work-related costs scheme. Similarly you’ll have to investigate whether the costs that make up other fixed allowances are still being made. Only insofar as that is the case will the allowance stay tax free.

Whether you have to continue to fully pay the fixed (travel) allowances depends on the agreements in the collective labour agreement, employment contract and personnel manual.

Home office allowance

You may be able to accommodate your employees with a tax-free allowance for working from home. Insofar as these are necessary for working safely at home, the reimbursement, provision or making available of a screen, computer / laptop, mobile phone, etc. is tax free.
If you determine that your employee does not have a suitable workplace at home, you can also provide a desk, office chair and / or adequate lighting to your employee if necessary and you have established a health and safety policy in this regard.

A general allowance for the extra costs of gas, water, electricity, coffee and tea at home is not tax free. You can, however, place it in the discretionary margin.

16 October 2020