How to file a mileage allowance claim in Luxembourg?

Most European countries (Sweden, Austria, Denmark, Hungary, France, Italy and Poland) don't require a specific government form for mileage allowance claims. Companies typically handle these internally.

Can I claim mileage allowance for both business and personal trips in Luxembourg?

You can claim a mileage allowance for business trips only. Personal trips do not qualify for mileage reimbursement under typical employer policies and tax regulations. Mileage claims must be tracked with documentation detailing the business purpose of each journey to be eligible for reimbursement or tax deductions.

Is there a limit to the number of kilometres I can claim for business trips in Luxembourg?

No, there currently isn't a specific limit on the total kilometres you can claim for business trips in Luxembourg. However, two key points to remember are:Trips must be for legitimate business purposesReimbursement cannot exceed €0.30 per kilometre

How can I maximise tax relief on travel expenses in Luxembourg?

To maximise tax relief on travel expenses in Luxembourg, use the standard mileage rate for business trips and keep precise records of all travel details and receipts. Try to use per diem rates to cover meal and lodging costs for overnight travel too. Make sure you confirm with your employer or have a clear travel policy, outlining which expenses are non-deductible to avoid claims on personal travel costs.

What is the HMRC equivalent in Luxembourg?

The equivalent of HMRC (His Majesty's Revenue and Customs) in Luxembourg is the Administration des contributions directes (Direct Tax Administration). This agency is responsible for the administration and collection of direct taxes such as income tax, corporation tax, and capital gains tax in Luxembourg.

Luxembourg mileage allowance and travel expense guide for business trips

Luxembourg’s charming villages and vibrant cities are perfect for business trips. But if your employee uses their private car for these journeys, understanding mileage allowance rules becomes crucial.

Get it wrong, and your business could face penalties or disgruntled employees feeling shortchanged. On the other hand, overpay, and you're essentially giving away money that could be better invested elsewhere.

In this guide, we break down the rates and explain the rules, all while keeping your employees happy and company finances healthy.

How does mileage allowance work in Luxembourg?

The mileage allowance in Luxembourg is a flat-rate mileage allowance for employees who use their private vehicles for business travel. This allowance costs like fuel, maintenance, depreciation and more.

Here are some key points:

The allowance rate is a fixed €0.30 per kilometre, regardless of the number of kilometres completed or the type of vehicle used

This €0.30 per km allowance is tax-free for the employee. Any amount paid above €0.30 per km becomes taxable compensation subject to income tax and social security contributions.

Employers do not need to collect receipts or documentation of actual costs from employees for this tax-free mileage allowance, up to €0.30 per kilometre

Employees cannot deduct actual expenses higher than this travel allowance. In Luxembourg specifically, the allowance amount is calculated pro-rata for employees not taxed for the full year.

What are the mileage allowance rates in Luxembourg for 2024?

The mileage allowance rates in Luxembourg for 2024 are structured to accommodate business travel via private cars and public transport.

Want to write a fair and transparent corporate travel policy? Check out our complete guide and start with a car allowance policy today.

Private Cars

Effective from January 1, 2024, the mileage allowance for using private vehicles for business travel is uniformly set at €0.30 per kilometre across all vehicle types—including compact, SUV, electric, hybrid or any other model.

This standardised rate simplifies the administrative process for both employers and employees. Similar to Croatia (€0.27), Czech Republic (CZK 4.90 per km), Portugal (€0.36), Slovakia (€0.193), Slovenia (€0.43), and Spain (€0.19), where flat-rates are also used for all vehicle types.

Note: Some other countries like Norway, Germany, Belgium and the Netherlands have different rates based on vehicle types or engine capacity.

Here’s a quick calculation based on the distance travelled:

Distance Travelled (km)

Reimbursement @ €0.30/km

Tax Status

50 km

€15.00

Tax-free up to €15.00

150 km

€45.00

Tax-free up to €45.00

300 km

€90.00

Tax-free up to €90.00

Tax Status: This allowance is tax-free up to the standard rate of €0.30 per kilometre. Any reimbursement above this rate would be taxable income. So if the employer’s reimbursement rate is €0.40 per kilometre, the excess rate taxable is €0.40 - €0.30 = €0.10 per kilometre.

Company cars as benefit in kind

When an employee is provided with a company car for their professional and private use, the car is considered a ‘benefit in kind’. This means the use of the car is valued as part of the employee's compensation and is subject to taxation under income from employment, along with social security contributions.

Starting from January 1, 2025, Luxembourg will implement a simplified rate for calculating the taxable benefit of company cars based on the vehicle type (engine) and CO2 emissions of the vehicle. This is intended to encourage the use of environmentally-friendly vehicles.

Here’s a quick overview of the company car benefit in kind rates from 2025:

Vehicle type

Electric consumption

ATN rate (benefit in kind)

Description

Pure electric cars

Up to 18 kWh/100km

Low-consumption electric vehicles benefit from a lower tax rate to encourage their use

Pure electric cars

More than 18 kWh/100km

1.2%

Higher consumption electric vehicles incur a slightly higher tax rate due to their greater energy use

Hydrogen Fuel Cell Vehicles

N/A

Hydrogen vehicles are grouped with low-consumption electrics for their zero emissions

Other Engines (Petrol, diesel, CNG, LPG and all types of hybrid and plug-in hybrid engines)

N/A

Traditional and hybrid engines have a higher rate to promote a shift towards zero-emission vehicles

Source

Tired of employee questions and delays around mileage reimbursement?

Read our guide for a step-by-step approach to writing a clear mileage reimbursement policy.

Public means of transport reimbursement for business trips

Since March 2020, all modes of public transport in Luxembourg—buses, trains, trams and funiculars—have been completely free for everyone, including residents and tourists. This means that:

No tickets or passes are required to use public buses, trains (2nd class), trams and funiculars within Luxembourg

The only exceptions where fees still apply are for 1st class train travel. This includes cross-border routes into neighbouring European countries like Belgium, France and Germany based on two pricing zones (RegioZone 1 and 2)

Costs for cross-border travel tickets in Luxembourg:

Ticket Type

RegioZone 1 (Belgium, France and Germany)

RegioZone 2 (Distant German destinations of Dillingen, Saarlouis and Saarbrücken)

2-hour ticket

€3

€5

1-day ticket

€5

€9

Monthly pass

€40

€85

Annual pass

€360

€750

Source

What is not included in the mileage allowance?

The travel expenses that are not included or covered under this mileage allowance for Luxembourg are:

Miscellaneous travel-related expenses: this includes parking fees, tolls and other incidental costs incurred during travel. These are typically reimbursed based on actual expenses and supported by receipts or proof of purchase.

Per diem allowances: these are fixed daily allowances for accommodation and meal expenses during business trips and do not require submission of receipts.

Here’s a quick look at per diem rates for business travel within Luxembourg:

Type of Expense

Amount

Details

Day Compensation

€14

Intended to cover meal expenses for a full day.

Night Compensation

€56

Includes accommodation costs, breakfast, service and related taxes.

Source

Simplify business travel and go green with TravelPerk

Business trips in Luxembourg are a breeze with mileage allowances in place. But, managing individual expense reports, finding car rentals, keeping tabs on a travelling team? It soon becomes far from breezy.

TravelPerk offers a user-friendly solution that simplifies every aspect of corporate travel—from booking flights and accommodation to managing itineraries. With an extensive library featuring tens of thousands of negotiated rates, TravelPerk ensures cost-effective travel options for businesses while keeping the employee experience second to none.

TravelPerk also prioritises sustainability. With GreenPerk, you can automatically offset your business travel's carbon footprint by contributing to VERRA-certified environmental projects on every trip.

Simplify your business travel management. Once and for all.

Frequently asked questions about mileage allowance for Luxembourg

How to file a mileage allowance claim in Luxembourg?
Can I claim mileage allowance for both business and personal trips in Luxembourg?
Is there a limit to the number of kilometres I can claim for business trips in Luxembourg?
How can I maximise tax relief on travel expenses in Luxembourg?
What is the HMRC equivalent in Luxembourg?

Mileage allowance in Luxembourg: everything you wanted to know (2024)

How does mileage allowance work in Luxembourg?

What are the mileage allowance rates in Luxembourg for 2024?

Private Cars

Company cars as benefit in kind

Public means of transport reimbursement for business trips

What is not included in the mileage allowance?

Simplify business travel and go green with TravelPerk

Simplify your business travel management. Once and for all.

Frequently asked questions about mileage allowance for Luxembourg

How to file a mileage allowance claim in Luxembourg?

Can I claim mileage allowance for both business and personal trips in Luxembourg?

Is there a limit to the number of kilometres I can claim for business trips in Luxembourg?

How can I maximise tax relief on travel expenses in Luxembourg?

What is the HMRC equivalent in Luxembourg?

Make business travel simpler. Forever.

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