What will change as of January 1st 2025?
The purpose of the clarification in the law is to allow employers to reimburse, provide or make available the cost of free travel or discount on public transport without paying payroll tax on this. This targeted exemption applies to business travel as well as private travel, as long as the employee also uses the public transport card or subscription for business travel. Business travel also includes commuting. The condition that the public transport must be in the Netherlands is also removed, which means that subscriptions or discount cards for foreign public transport will also be tax exempt as of 2025.
How does this impact your administration?
As long as the employer can make it plausible that there is (at least some) business use of the right to free travel or the right to discount, he no longer needs to keep records of private use and business use. This reduces the administrative burden, especially as hybrid working becomes more and more the norm. This measure allows employers to make sustainable transportation more attractive without experiencing additional administrative burden. The proposed clarifications are part of the working expenses scheme (WKR) and contribute to simplifying the administrative burden surrounding travel expense reimbursements.
These proposed measures will take effect on January 1, 2025. Changes reserved.
