Travel costs in 2013
Tax-free travel expenses scrapped
The budget agreement from the VVD, CDA, D66 and ChristenUnie was presented today. The final version of the Spring agreement shows that the tax-free travel cost allowance for commuting to and from work will be abolished. There are also adjustments which affect drivers of company cars. Below is a brief explanation of how these changes may affect you.
Consequences of tax-free travel allowance abolishment
The travel expenses for commuting will no longer be disbursed tax-free with effect from January 1, 2013. This applies to all modes of transport such as cars, public transport and bikes. The rationale behind the budget is that the tax system can be made more environmentally friendly. By taxing pollution more space is created to reduce labour tax. That the latter is not yet possible due to the current budget deficit makes this a harsh budget to swallow.
Consequences for the company car
As of January 1, 2013 the kilometres made in the company car while commuting to and from work will be considered private and therefore will be counted in determining whether or not there should be a private use adjustment.
Transition period public transport
OV subscriptions (train, tram, bus, metro) which were purchased before May 25, 2012 will not be affected by the new laws. The travel made with these subscriptions will remain tax-free.
Transition period company cars
The new transition law only applies to people who entered into lease contracts before May 25, 2012 and who now make less than 500 private kilometres per year with their company car. Only these people will be hit by the new measures as all other drivers of company cars already have a private use addition.
The transition law applies for the term of the lease but ultimately ends on January 1, 2017. Those affected will not be completely spared, but will pay 25% of the actual addition payable, i.e. 25% of 25%, or 20% of 14% for a very economical car. This transitional agreement applies only if the car is used solely for business and the other private use is limited to a maximum of 500km per year. If the private use rises to above 500km per year, then the 'normal' addition applies.
The favourable tax treatment of the bike in the work-related costs scheme is maintained. The percentage of the work-related costs scheme goes from 1.4% in 2012 to 1.6% in 2013 and will reach 2.1% in 2014. This gives employers the space to reimburse costs as they wish.