Tax-free travel allowance increases, motor vehicle tax reduced
The maximum tax-free travel allowance increases by €0.02 to €0.25 per kilometre. This increase applies retroactively for the entire year of 2026. The government aims to compensate employees for rising fuel costs related to commuting.
The government is introducing measures to support companies and citizens with the economic consequences of unrest in the Middle East. In total, €627 million is allocated for spending measures and €340 million for targeted tax relief in 2026. The country has also been escalated to phase 1 of the National Oil Crisis Plan. Because energy prices are expected to remain high for the time being, even if the conflict eases quickly, the government considers intervention necessary.
Reiskostenvergoeding omhoog
Increase in travel allowance
To strengthen purchasing power, the government is structurally increasing the maximum tax-free travel allowance from €0.23 to €0.25 per kilometre, retroactively for the whole of 2026. Employers are encouraged to make use of this tax benefit so that employees actually receive the advantage. The government intends to discuss this with social partners. The Tax Administration needs three months of preparation time; the approved policy decision will later be included in a legislative proposal.
Consequences for employers
The proposed increase in the tax-free mileage allowance may seem beneficial at first glance, but according to employers’ organisation AWVN it also has clear drawbacks. The additional costs are fully borne by employers, leaving less financial room for salary increases and other employment conditions. In practice, the measure only means that no tax is levied on the extra two cents; employers must still pay the full amount. AWVN therefore advocates a broader approach to mobility, with alternatives such as more working from home and encouraging public transport or electric driving.
Motorrijtuigenbelasting omlaag
Reduction in motor vehicle tax
Entrepreneurs with vans benefit from a temporary reduction in motor vehicle tax: for six months, the rate is reduced by 50 percent. For trucks, motor vehicle tax will be reduced to zero from 1 July 2026 until the end of the year. Both measures will be formalised through an approved policy decision and later incorporated into legislation.
At the same time, the government is in discussions with the public transport sector to further strengthen public transport as an attractive alternative.
Adjustment of tax schemes
To finance these relief measures, the government is adjusting several tax schemes. For example, the small-scale investment deduction is being scaled back by lowering the maximum investment amount, the start-up deduction will be abolished from 2027, and alcohol excise duty will be indexed again from 2027.
