As a freelancer, you often enjoy the freedom to work anywhere you want, which can involve travel expenses if the location is not within walking distance. Fortunately, you can receive a reimbursement for these costs. But how does the mileage reimbursement for freelancers work exactly?
Travel expenses included in your hourly rate
Keep in mind that travel expenses are typically included in your hourly rate unless you make other arrangements with the client. However, the Tax Authority has regulations regarding travel expenses if you meet certain conditions, which we'll discuss below.
What is the mileage reimbursement for freelancers?
The mileage reimbursement is a compensation for the kilometers you travel for work. You receive this reimbursement only for the kilometers you travel using a mode of transportation that is not owned by your company but is privately owned. We'll provide more information about this below. For rules regarding traveling with a company or leased car, Google is your best friend.
How the mileage reimbursement works depends on the mode of transportation you use. You can travel by car, bicycle, public transportation, or taxi. Here are a few scenarios:
Situation 1: Traveling by (private) car
With a car, you have the freedom to go wherever you want. If, in addition to your business trips, you drive more than 500 kilometers privately with your car, you can use your private car for commuting to work and are entitled to a reimbursement.
Mileage reimbursement and VAT
If you drive your own car, as of 2023, you can deduct a maximum of €0.21 per kilometer driven in your Income Tax return. This reduces your profit, resulting in lower income tax payments. Additionally, the VAT on the maintenance and use of the car is tax-deductible to the extent that it is used for business purposes. Read the conditions here. You need to declare this in your VAT return.
Situation 2: Traveling with your own bicycle
Suppose the client's location is nearby, and you decide to commute to your job by bicycle. The same rules apply as with a car. However, if you rarely or hardly use your bicycle for personal purposes, it is mandatory - and sometimes even more advantageous - to register the bicycle under your company's name.
If your bicycle is considered a private possession, as of 2023, you can receive a reimbursement of €0.21 per kilometer. This is similar to a private car. This reimbursement applies to both commuting and other business trips.
No deduction of other costs
The reimbursement of €0.21 per kilometer covers all costs. This means you cannot deduct any other expenses, such as insurance, bicycle parking, or purchase costs, from your profit.
Situation 3: Traveling by public transportation or taxi
If you travel to clients using public transportation or a taxi, the mileage reimbursement of €0.21 per kilometer does not apply. In this case, the costs are fully deductible as business expenses. However, it is important to keep all receipts well organized.
Don't forget: You can also reclaim the paid VAT on your public transportation tickets. There is a 9% VAT charged on train, metro, bus tickets, and even your public transport card. You can offset this amount during your btw-aangifte.
How to keep mileage administration?
Do you use a private car, public transport or a bicycle? Then you can use our handy administration tools.