In order to mitigate the impact of higher energy prices, employers are temporarily being encouraged to increase the mileage allowance for commuting and professional travel. On 29 May 2026, Parliament approved a law which grants employers a tax credit for the increase of the mileage allowance for commuting. The law is expected to be published in the Belgian Official Gazette later this month. Besides this law, the tax authorities, by circular letter, also allow employers to increase the mileage allowance for professional travel.
Tax credit for increasing mileage allowance for commuting
The new law grants employers a tax credit for increasing the mileage allowance for commuting.
- The tax credit is granted for increases paid or granted at the latest on 31 October 2026 for commuting between 1 May and 31 July 2026
- In the case of the introduction of a mileage allowance, the allowance must amount to at least EUR 0,10/km
- The tax credit equals
- In case of an increase: number of km * amount of the increase of the allowance (max. the lower of 20% of the existing allowance or EUR 0,10/km)
- In case of an introduction: number of km * 20% of the allowance (max. EUR 0,10/km)
- The portion of the allowance for which a tax credit is granted is not tax deductible
- Any unused tax credit is refundable
- A document containing the necessary data must be attached to the tax return (corporate income tax or legal entities tax) or kept at the tax authorities’ disposal (personal income tax)
The increase of the mileage allowance is exempt in the employee’s hands
- Only if professional expenses are determined on a lump sum basis
- The exemption is limited to the amount of the tax credit
- The amount exceeding this limit may qualify for the existing exemption of EUR 500
- In principle, the exemption also applies for social security purposes
Commutes by “vehicle” are eligible, where “vehicle” means any motor vehicle (including electric vehicles and hybrids), with the exception, among others, of motor vehicles for which an exempt bicycle allowance can be granted, such as electric bikes or speed pedelecs, or for which the employer contributes to fuel or charging costs. The increase in the employer’s contribution to the cost of a train season ticket (to be converted into a mileage allowance) is also eligible as are allowances for carpooling.
Circular letter published on mileage allowances for professional travel
Aside from the intervention for commuting purposes, the tax authorities have also issued a circular letter on mileage allowances for professional travel.
The circular letter provides for a temporary adjustment of the flat-rate mileage allowance for business trips when employees use their own vehicle. Generally speaking, employers can choose for an amount updated on a quarterly basis, or the amount updated annually. When choosing for the latter, the amount is fixed for the entire year and cannot be changed (July through June).
However, for the period from 1 April 2026 to 30 June 2026, the allowance will no longer be adjusted on a quarterly basis but will be updated every month, in light of the volatility of the fuel prices. For employers applying the quarterly system, the monthly rate will apply as a default. By way of exception, employers who use the annual amount, can switch to the monthly system for the period April-June 2026.
The amounts are currently set as follows:
- April 2026: EUR 0,4571/km (previously 0,4327 for April-June 2026)
- May 2026: TBD
- June 2026: TBD
- Annual amount July 2025 – June 2026: 0,4449/km
