New expense allowances for foreign business trips
When a managing director or an employee goes abroad on business, they will often incur certain expenses. Think of meal or taxi expenses. You can of course keep all receipts, invoices and proof of payment and thus reimburse the expenses ‘one on one’, but for practical reasons this is not always possible. The employer or company can also reimburse these small expenses on a flat-rate basis.
To apply these flat-rate expense allowances you can rely on a ‘country list’. In this list, the government has specified the exact amounts of allowances per country and per day (of at least 10 hours). For the first time in almost five years, this list has been updated.
If the reimbursements do not exceed the amounts appearing on this country list, they remain 100% tax deductible and one will not be taxed on them privately.
For a day in the Netherlands, for example, one can be reimbursed a maximum of 98 EUR at a flat rate, and 87 EUR for a day in Germany.
What is included in the lump sum?
The lump sum covers the cost of meals, drinks, local transport and other minor expenses on site. It does not include accommodation (e.g. hotel) or travel costs (e.g. flight) to the destination. The employer may reimburse these costs on top of the daily flat rate. You will however need to keep the relevant supporting documents.
Unfortunately, if you were to travel daily or weekly, making this an important part of your normal professional activity, you cannot be reimbursed with the above flat-rate allowances.
The tax authorities accept either the country list amounts or a flat rate of 37.18 EUR per day regardless of destination. A private sector employer can therefore choose between two flat rates.
When the lump sum needs to be reduced
If the employer or company also reimburses hotel and accommodation expenses that include certain meals, the lump-sum daily allowance should be reduced by 35% for a lunch and 45% for a dinner.
Lower allowance for longer business trips
You can also reimburse according to the country list for business trips lasting longer than 30 days (and up to 24 months). However, the fees for this ‘category 2’ are lower.
For a day in the Netherlands during a trip of more than 30 days, you can get a maximum expense allowance of 59 EUR. For Germany, the maximum is 52 EUR.
If you need to stay abroad overnight, this can be reimbursed additionally. This accommodation allowance includes the cost of accommodation and breakfast. In principle, the reimbursement is based on the actual cost per night. In the absence of invoices or receipts, you can use the maximum flat-rate accommodation allowance from the country list.