Mileage Allowance and Deduction for Transport

Salaried employees and business owners can receive a mileage allowance or claim a deduction for transport.

Salaried employees and business owners who use their own car for business travel can receive compensation for the costs of such transport. This is done either by the employer paying a tax-free mileage allowance or by claiming a deduction for transport. In both cases, the actual number of kilometres driven determines the amount of the tax-free mileage allowance or deduction for transport.

The rates for payment of the tax-free mileage allowance are fixed by SKAT. SKAT has also laid down a number of conditions which must be fulfilled to qualify for tax-exempt mileage allowances. For example, it must be possible to check the mileage allowance paid against the actual number of kilometres driven. This gives rise to a number of cases brought by SKAT.

However, it is important to note that practice does not dictate a need to prepare actual mileage records, making it possible to meet this condition using other means.

If SKAT has raised doubts about compliance with the duty to check the number of kilometres driven or other conditions for tax exemption, we are ready to advise you on handling the dialogue with SKAT.

If the case is not handled properly and SKAT does not receive the information needed to check compliance with the conditions, there is a risk of the mileage allowance being taxed.

The same applies if a deduction has been claimed for work-related travel or transport between home and work. In such cases, SKAT is entitled to request information to check whether the appurtenant conditions have been met.

We offer professional advice, ensuring a professional dialogue with SKAT from the outset.