The lump sum mileage allowance from 1 July 2021 to 30 June 2022
Traditionally, shortly before 1 July, it is announced how much the mileage allowance will be for federal civil servants for trips with their own vehicle. But it is also news for accountants and tax advisers, since this amount also has tax relevance.
With your own vehicle
If you, as an employer, send your employee on the road with his own vehicle to arrange a few things, it is logical that you pay an allowance for the costs incurred. Strictly speaking, the employee must prove these costs. However, for practical reasons, the tax authorities accept that you calculate a lump sum allowance.
However, this allowance may not exceed a certain maximum. And that maximum is equal to the lump sum mileage allowance that federal civil servants receive for the use of their personal car for the purpose of the service.
For the period from 1 July 2021 to 30 June 2022, the maximum amounts to 0,3707 euros/km (versus 0,3542 euros/km for the previous year).
Attention: displacements made by an employee between his residence and his permanent place of employment are no displacements for the benefit of the employer! Those trips are therefore not eligible and if you pay an allowance for them, this is in principle considered as salary (although various exemptions are possible).
Maximum 24.000 km
With regard to trips on behalf of the employer, the tax authorities accept that you apply the lump sum allowance as long as the total distance is below 24.000 km. Above 24.000 km, the tax authorities will no longer accept the lump-sum calculation and therefore evidence must be presented.
The amount of 0,3707 euros/km is also just a maximum. If the employee can demonstrate a higher cost, you may grant a higher allowance, but always subject to the necessary proof.
Note that this regulation also applies for social security purposes. In principle, all allowances you pay to an employee is considered salary. Costs that are proper to the employer are deducted from the salary and you can use the same lump sum as the one used by the tax authorities for travel costs.
Can you, as an employer, deduct this allowance?
Up to tax year 2020, fuel costs and other car costs were treated differently for corporate tax. For this reason, to calculate the lump sum allowance deduction, it was split up into a part for the fuel and a part for all other costs (such as depreciation and maintenance). The ratio between the two parts was fixed at 30% fuel and 70% other costs.
However, due to the radical change in the deductibility of car expenses as from 1 January 2020 (tax year 2021), this split-up is no longer necessary. All car expenses are deductible based on the following formula:
120% - (0.5 x coefficient x CO2 emissions (in gr/km))
The coefficient is:
1 for diesel cars;
0.90 for cars running on natural gas (with a power less than 12 fiscal horsepower) and
0.95 for cars with a different engine (petrol, electric, LPG,
The deduction calculated using this formula cannot be higher than 100% and not lower than 50% (40% if the car emits more than 200 gr/km CO2).
The distinction between fuel costs and other costs is no longer relevant.
Apart from the above, the mileage allowance for federal civil servants is also used for another lump sum calculation. The status of volunteer does not allow payment for services rendered. Only an expense allowance is allowed. In addition to the general maxima per month and per year, a separate limit applies to travel allowances. The limit is set at 2.000 km per year per volunteer (there is no limit for volunteers whose activity is the regular transport of people). In this case, too, the allowance may not exceed the mileage allowance for federal civil servants.
The price of convenience
The great advantage of the lump sum calculation is that the employer and employee can limit themselves to proof of travelled distance. Moreover, an allowance of 0,3707 euros/km is not ridiculously low. As with any lump sum calculation, there will be winners and losers, but it is in any case a very simple and practical method.