The Dutch government has announced that the existing approval for tax-free commuting allowance will be extended until 1 July 2021. The approval applies to commuting allowances already granted to the employee before 13 March 2020.

Furthermore, the cabinet mentions that the introduction of a new tax-free allowance for expenses incurred when working at home is not to be expected before the end of this year.

The extension is a temporary measure. Many enterprises anticipate that their organization will change as a result of the COVID-19 situation. Therefore, they are reconsidering their policy for allowances and reimbursements. For more information about the tax treatment of allowances and reimbursements, please contact our Employment tax team.