A new tax deduction reimburses your car trips to work

The amended Finance Bill for 2022 is currently being considered in committee before being considered in the National Assembly. An amendment passed on July 12 plans to turn the actual tax deduction into a business travel tax deduction.

This is an amendment that could relieve the portfolio of a large number of taxpayers while petrol prices are approaching 2 euros per liter. On the occasion of the consideration of the amended Finance Act for 2022, the deputies in the committee gave the green light to an important change regarding the mechanism for deduction of real travel expenses.

It provides employees who choose actual costs will be able to benefit from a credit ofincome tax. Currently, declaring your actual costs allows you to take advantage of one only tax deductions, that is, the amount of travel expenses incurred will be deducted from the amount paid to the state. Therefore, a non-taxable person can not benefit from it. Similarly, if the amount of the actual costs is greater than the amount of the tax, the taxpayer will not receive a refund.

A gasoline budget that undermines purchasing power

However, with the rise in fuel prices the monthly fuel budget for commuting is becoming increasingly important, which greatly affects purchasing power. For employees who travel long distances between home and work, the actual cost tax scheme allows them to benefit from more favorable tax deductions for business travel expenses. Nevertheless, a large proportion of individuals are not taxable, which prevents them from benefiting from this system, MPs Charles de Courson and Michel Castelani explain in the presentation of their amendments.

According to the latest tax statistics for almost 40 million tax households, 44.2% of the population was actually taxable in 2021, ie. 17,625,415 households.

A very framed advantage

The change, which was adopted on Tuesday, will therefore allow non-taxable employees to benefit from the real scheme, by obtaining reimbursement of the costs incurred. But it has several security measures. Due to its cost to the public finances, it would only be valid temporarily until 31 December 2023. To finance it, an additional tax on the sale of tobacco would be introduced.

This tax deduction scheme would relate daily trips between home and work, with a maximum distance of 40 kilometers per. Supporting documents will be provided at the time of the income tax return. Although this tax deduction only applies to the first 40 kilometers, full consideration of the journey for longer distances can be considered in case of special circumstances, especially related to the special nature of the job. The exact conditions have not yet been determined.

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Note, however, that this amendment was adopted by the Committee on Finance, but the final text has not yet been voted on. This measure will therefore only apply if the bill is passed.

Professional travel also affected

The text addresses travel home to work, however Business trips are also eligible if made with a personal car. A fixed scale will be set per. stop, taking into account the administrative force of the vehicle used (within the limit of 7 horsepower) and the distance traveled during the year.

As is the case today for the tax deduction, stakeholders will not be obliged to use the mileage scale stated by the administration and will be able to state the costs actually incurred. On the other hand, they will not be able to claim a tax deduction higher than the above scale, set for business travel, identical distances traveled and with a vehicle with the maximum administrative power that the scale retains.

Mileage scale: should you choose the actual cost to reduce your 2022 tax?

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