Tax-free continuation of the fixed (travel) expense allowance for working from home during the corona crisis expires in 2021

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Many employees receive a fixed (travel) expense allowance from their employer every month. As a result of the current Corona measures, employees have to work from home as much as possible, which could have consequences for this reimbursement.

Temporary approval: costs can remain untaxed

To prevent this from happening, Secretary of State Vijlbrief of Finance approved in the Corona Crisis Emergency Measures Decree that employers may continue to regard the fixed commuting allowance as travel days and may continue to base the fixed allowance on the facts and circumstances on which the allowance is based.

They can specifically exempt this allowance and thus continue to pay the travel expenses untaxed. Employers may also continue to base the fixed expense allowances on the facts and circumstances on which the allowance is based.

Condition for approval

Both the fixed travel allowance and the fixed expense allowance are subject to approval if an unconditional right to the allowance existed prior to March 13, 2020.

In 2020, the Tax and Customs Administration will take a flexible approach to employers who are unable to comply with an administrative obligation because of the coronary measures. For example, the timely identification of a new employee during the corona crisis is not always possible. Normally, the employer then has to apply the anonymity rate. He may now omit this under certain conditions.

Approval expires on 1 January 2021

In the update of the Coronacrisis Emergency Measures Decree, State Secretary Vijlbrief states that these approvals only apply for 2020 and will expire on 1 January 2021.

Employers must determine the employee’s travel pattern as of January 1, 2021.

The expiration of the approvals means that employers will have to determine the (changed) commuting pattern of their employees next year. They have to check this against the 36 week or 128 day requirement and check whether they can still give a fixed allowance. Employers can also reimburse the costs of commuting based on the days actually travelled.

Furthermore, as of January 1, 2021, employers will no longer be able to reimburse small expenses for homeworking days. As a result of working more from home, the facts and circumstances have changed for many employers. They will therefore have to assess whether the substantiation for the reimbursement in 2021 is still sufficient.

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