What is mileage allowance?
Mileage allowance is a tax scheme that allows you to deduct business kilometres from your profit. If you drive your own (private) car, motorbike or bicycle to a customer or assignment, the tax authorities consider this to be business kilometres. You may enter a fixed amount per kilometre as expenses for this. This scheme is intended to compensate entrepreneurs for travel expenses such as fuel, maintenance and insurance. The reimbursement only applies to journeys directly related to your business and to private means of transport. If you have a company vehicle, other rules apply.
How high is mileage allowance in 2026?
The mileage allowance is set at 23 cents per kilometre in 2026. This amount applies to all means of transport you use privately for business trips. You may deduct the amount from your profit when filing your income tax return. The rate has been increased in recent years to better reflect increased travel costs.
| Year | Mileage allowance |
| 2021 | € 0,19 |
| 2022 | € 0,19 |
| 2023 | € 0,21 |
| 2024 | € 0,23 |
| 2025 | € 0,23 |
| 2026 | € 0,23 |
It is important not to exceed this amount, as higher amounts will not be accepted as business expenses.
Calculation of mileage allowance
You calculate the mileage allowance by multiplying the number of business kilometres by 0.23 euros. Say you drive 1,000 kilometres for customer visits in 2026. Then you may deduct 1,000 × €0.23 = €230 from your profit. This deduction applies to all business trips with your private car or bike. You may not include additional costs for fuel or maintenance, as these are already included in the allowance.
Besides deductions, you may also pass on travel expenses to your client. This can be done in two ways: via the invoice or incorporated in your hourly rate. Both options are allowed, as long as you clearly state this in your records and on your invoices.
On the invoice
You can put kilometres separately on your invoice. For example: “Travel expenses 100 km × €0.23 = €23.” You have to charge VAT on this amount because it is part of your turnover. This keeps your invoice fiscally correct. This is useful if you carry out varying assignments in different locations.
In the hourly rate
Another option is to include your travel costs in your hourly rate. You then increase your standard rate slightly so that your travel costs are included. This saves administration, especially if you make a lot of short trips. You then don't have to invoice separate travel expenses, but do keep track of your mileage internally for your tax return.
When does the mileage allowance apply?
The mileage allowance only applies to business trips using a private means of transport that are directly related to your business. These include journeys to customers, suppliers, business appointments, fairs or courses. Journeys to your own office or workplace outside your home also count. If you live and work at the same address, you cannot include these journeys.
You may not include private trips or detours during business trips. The tax authorities only accept the kilometres actually driven for business purposes. It is therefore wise to clearly separate trips between business and private.
Do you have a company vehicle? Then the mileage allowance does not apply, but you may deduct all costs. Read more about the buying a car for business or private use.
Mileage tracking
A trip registration is important to show how many kilometres you have driven on business. You do not have to submit these by default, but the tax authorities may ask for them. For each trip, record the date, departure and arrival addresses, the purpose of the trip and the number of kilometres. You can do this on paper, in Excel or with an app.
Proper registration prevents errors in your tax return. You can also use this to calculate the percentage of business use if you use the car partly privately. Keep your records for at least seven years, as required for entrepreneurs.
How does the mileage allowance by mode of transport work
How you apply the mileage allowance depends on the means of transport you use. The rules differ for a private car, a business car or public transport.
Private car or private bicycle
If you use your private car or bike for business trips, you can deduct 23 cents for each kilometre. This allowance covers all costs of use, such as fuel, maintenance and insurance. You do not need to keep separate receipts, but you do need to keep a comprehensive mileage record.
Company car, motorbike or bicycle
As the car, motor or bike is in your company's name, you may no longer deduct a mileage allowance. Costs such as fuel, insurance and maintenance are then entirely business expenses. However, you do have to take into account additional taxes for private use, because the company pays the costs.
Public transport
If you travel by public transport, you don't get a mileage allowance. Instead, deduct the actual costs, such as train tickets or season tickets. Keep all tickets or invoices to prove business travel.
VAT on mileage allowance
The mileage allowance itself does not contain VAT. So you cannot reclaim VAT on those 23 cents. However, you can reclaim VAT on fuel, maintenance or lease costs if the car is on company business. When charging kilometres on an invoice, you do have to charge VAT, as this is considered part of your turnover.
Common mistakes
Although mileage reimbursement seems simple, in practice things often go wrong. Entrepreneurs forget rules, use wrong rates or do not keep track of their mileage properly. Below are the most common mistakes made by self-employed entrepreneurs.
- Not keeping a trip log, making it impossible to prove how many business kilometres you drove.
- Deduct more than 23 cents per kilometre, while that is the maximum amount allowed in 2026.
- Combining mileage allowance with car expenses, while having to choose between reimbursement or actual costs.
- Private trips or detours count as business, while only business trips count.
- Not charging VAT on recharged kilometres, while it is mandatory because it is part of your turnover.
- Forgotten addition to be applied to a company car, if you drive more than 500 kilometres privately.
