CE Delft, together with Significance, was commissioned by the Ministry of Finance to evaluate untaxed travel allowances. This scheme allows employers to provide employees with an untaxed allowance for travel expenses incurred for business and/or commuting purposes.
The Ministry is using this assessment to fulfil its obligation to periodically evaluate all tax schemes in accordance with the Periodic Evaluation Regulations (Regeling Periodiek Evaluatieonderzoek). In addition, this study explored the request of the Lower House for a better understanding of options for modernising travel allowances.
The main findings of the evaluation are:
However, the precise interpretation of both objectives is unclear.
The analysis of possible modifications to the scheme shows that there are options to significantly reduce the negative environmental and congestion impact of the scheme, mainly by scaling back the scheme. However, these modifications do result in a decrease in positive labour market effects. There is an important trade-off at this point. There is no possible modification of the scheme that combines these two social objectives.