The Tax and Customs Administration has published an Expert Group opinion on offsetting travel allowances in the event of successive employment contracts.
An employee worked for an employer from 1 January 2023 to 1 July 2023 under a temporary employment contract. This person received a new employment contract with the same employer for an indefinite period from 1 July 2023. The work remained the same. The employee is entitled to €0.10 per kilometre for commuting and €0.30 per kilometre for business trips throughout the calendar year. The employee uses their own car to travel 100 km per month for commuting and 250 km per month on business trips.
The employer applies the offsetting arrangement in Section 31a(4)(e) of the Wages and Salaries Tax Act 1964 (hereafter: LB 1964) at the end of the calendar year, in accordance with the collective labour agreement standard. The employee has no choice in this. The employer has designated all travel expense allowances as a final levy amount in the meaning of Section 31(1)(f) of the LB 1964.
Question
Is there a payment moment on 30 June 2023 for the application of the offsetting arrangement?
Answer
No. Travel allowances in excess of €0.21 are deemed to have been paid at the end of the calendar year. An exception applies if the employment ends during the course of the calendar year. It is not the case here because for tax purposes the employment was continued.