The indemnity amounts paid by employers to employees for the use of their private cars for professional purposes decreased from € 0.40 per km to € 0.30 per km, as of 1 August 2015. All amounts paid above the lump sum of € 0.30 per km will be considered to be a benefit in kind and taxable as salaried income. As such, this benefit is subject to wage tax, to the temporary tax for the budget balance, and to social security contributions (up to the ceiling except for the dependence insurance).
Accordingly, as of 1 August 2015, for payments of € 0.40 per km, the taxable benefit will be € 0.10 per km. Employers will be responsible for determining the correct taxation of the benefit.
Read a September 2015 report (English, French, German) prepared by the KPMG member firm in Luxembourg: Lump sum indemnity for private car use
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