Have you ever thought about optimizing your pay as a business manager with a smart travel expense reimbursement for your domestic business trips? This can provide fantastic net benefits and is also 100% deductible in your company. But what does this allowance entail, and how can you benefit from it? You can read all about it in this blog.
What is the travel allowance for domestic business travel?
The travel allowance for domestic business trips is a fixed amount that your company pays to you as a company manager to cover your expenses for meals and accommodation during professional trips within Belgium.
There are two types of travel allowance:
- Daily travel allowance: This is an allowance per day you are on duty travel.
- Monthly travel allowance for frequent business trips: This is a flat monthly allowance you receive, provided you are on the road an average of 16 working days per month.
If you meet all the conditions, you do not have to pay taxes on this allowance. In addition, the full amount of the allowance is tax-deductible for your company.
What is the maximum amount of reimbursement for domestic business travel?
Below is an overview of the maximum travel reimbursement rates that may be granted for domestic business travel. These maximums have been in effect since January 1st, 2023:
- Meal cost: €19.99 per day
- Accommodation expenses: €149.99 per night
- Maximum monthly flat-rate allowance for regular domestic business trips: max. 16 x €19.99 = €319.84
What are the conditions for the untaxed travel allowance?
To benefit from the tax-free travel allowance, you must meet these 4 conditions:
- Only for company managers, not for sole proprietorship
This allowance is specific to company managers and does not apply to sole proprietorship. However, as a sole proprietor, you can deduct your actual expenses for business travel, but be sure to keep receipts if you consume something on the road.
- The trip lasts a minimum of 6 hours
Travel reimbursement only applies to professional trips that last more than 6 hours. If you spend only a few hours with a client and then return to your home or office, you do not qualify. You must be able to prove that your trip lasted at least 6 hours.
Exception: If you take advantage of the monthly travel allowance, you do not have to prove that your daily trips lasted at least 6 hours. In that case, you can work with this, provided you average 16 working days per month on the road.
- Maximum of 40 trips to the same location per year
To be entitled to the allowance, you may make up to 40 trips to the same location per year. If you do more than 40 trips to the same location, the IRS will consider it a permanent workplace, and you will no longer qualify for the travel allowance for any trips.
- Do not exceed the maximum daily allowance
Finally, you must respect the maximum daily allowance. To determine this, it’s best to follow the amounts paid by the federal government to its employees.
Can I combine meal vouchers with the travel allowance?
Better not. Although meal vouchers are tempting, it is advisable to opt for the daily travel allowance when you are eligible for it. Why? Because it is 100% tax-deductible for your company. However, for days when you don’t travel, you can always consider meal vouchers.
The flat daily allowance for domestic business travel is a golden opportunity for business managers to optimize their net profits and provide tax benefits to their company. Be sure to always stay up to date with the latest regulations and consider seeking professional advice for the best results.
Want to learn more about expense reimbursement for domestic business travel, or have any other questions? Contact us, and we’ll connect you with a partner accountant.