Flat-rate mileage allowance from 1 July 2020 to 30 June 2022
September 2021 – The amount of the mileage allowance for federal civil servants who travel with their own vehicle is traditionally communicated shortly before 1 July. However, this announcement also concerns accountants and tax advisers, as the amount of this allowance is also relevant for tax purposes.
With own vehicle
If, as an employer, you ask your employee to use his or her own vehicle for one or other activity, it is logical that you should pay him or her an allowance for the costs incurred. Strictly speaking, the employee must prove these costs. However, for practical reasons, the tax authorities accept that this allowance can be calculated on a flat-rate basis.
However, the allowance may not exceed a certain maximum, which is equal to the flat-rate mileage allowance that federal civil servants receive for the use of their personal motor vehicle "for service purposes".
For the period from 1 July 2019 to 30 June 2022, the maximum is set at EUR 0.3707 per kilometre (compared with EUR 0.3542 per kilometre for the previous year).
Please note: journeys that an employee makes between his or her home and his or her fixed place of work are not journeys made on behalf of the employer! These journeys are therefore not taken into account and if you pay an allowance for these journeys, it will in principle be considered as remuneration (even if various exemptions are possible).
Maximum 24,000 kilometres
For travel on behalf of the employer, the tax authorities accept a flat-rate allowance as long as the total distance travelled remains below 24,000 kilometres. Beyond 24,000 kilometres, the tax authorities will no longer accept the flat-rate calculation and you will still have to provide proof.
What is more, the amount of EUR 0.3707 per kilometre is 'only' a maximum. If the worker can prove higher costs, you can pay him/her a higher allowance, again provided you produce the necessary evidence.
Please note that this regulation also applies to the NSSO. In principle, all the allowances you pay to the employee are regarded as remuneration. The employer's own expenses are excluded from the remuneration and, for travel expenses, you can use the same flat rate as that applied by the tax authorities.
Can you, as an employer, deduct this allowance?
Until the 2020 tax year, fuel costs and other car expenses were treated differently in corporation tax. The lump sum allowance for the calculation of the expense deduction was therefore split into a part for fuel and a part for all other costs (such as depreciation and maintenance costs). The proportion between the two was set at a flat rate of 30% for fuel and 70% for other costs.
But this radical change in the deductibility of car expenses from 1 January 2020 (tax year 2021) makes this distinction unnecessary. All car expenses are deductible on the basis of the following formula:
120% - (0.5 x coefficient x CO2 emission (in g/km))
The coefficient is as follows:
“1” for diesel cars;
“0.90” for natural gas cars (with less than 12 fiscal HP);
“0.95” for cars with other engines (petrol, electric, LPG, etc.).
The deduction calculated using this formula cannot be more than 100% or less than 50% (40% if the car has a CO2 emission of more than 200 g/km).
Volunteers
Irrespective of the above, the mileage allowance for federal civil servants is used for another flat rate calculation. The status of volunteer does not allow for any payment for services rendered. Only reimbursement is permitted. In addition to the general monthly and annual maximums, a separate maximum applies for travel allowances. The limit is set at 2,000 kilometres per year per volunteer (there is no limit for volunteers whose activity consists of regularly transporting people). Nor can the allowance exceed the mileage allowance for federal civil servants.
The price of convenience
The great advantage of the flat-rate calculation is that the employer and the employee can limit themselves to proving the kilometres travelled. What is more, an allowance of 0.3707 euros per kilometre is not ridiculously low. As with any flat-rate calculation, there will be winners and losers, but this way of proceeding has at least the merit of being simple and practical.
