Law introducing tax credit for increased commuting allowances published

On 8 June 2026, legislation introducing a tax incentive in the form of a tax credit to encourage employers to increase commuting (home-to-work travel) allowances for employees was published in Belgium’s official gazette (Dutch | French).

Tax credit for increased commuting allowances

A tax credit is granted to eligible employers who increase commuting allowances paid or granted to employees for commuting during the period from 1 May 2026 to 31 July 2026, provided such increases are paid or allocated by 31 October 2026.

Private sector employers and certain public institutions are eligible for the credit where certain qualifying conditions are met. Key conditions include that the increase must be:

• Granted in writing;

• A minimum of EUR 0.1 per kilometre (when the reference allowance is EUR 0);

• Not compensated by third parties or foreign establishments; and

• For foreign employers, only granted in relation to profits taxable in Belgium.

Calculation of tax credit

The tax credit is calculated as the number of kilometres for which an increased commuting allowance is granted, multiplied by the amount of the increase, limited to the lesser of:

• 20% of the reference allowance; or

• EUR 0.1 per kilometre.

When the reference allowance equals EUR 0, the tax credit is calculated as 20% of the increase in the commuting allowance, capped at EUR 0.1 per kilometre.

The tax credit applies for each tax period related to tax years 2026 and 2027 during which the employer grants an increase in commuting allowance for travel performed between 1 May 2026 and 31 July 2026.

Tax deductibility and refund

The increase in commuting allowance for which a tax credit is granted is not deductible as a professional expense.The tax credit is fully imputed against personal, corporate, legal entities, and nonresident income tax. Any portion of the tax credit that cannot be imputed is refunded.

Documentation and reporting requirements

Required documentation

Employers claiming the tax credit must prepare a document containing the following information to supplement the income tax return:

• The reference allowance amount per kilometre (April 2026);

• The increased commuting allowance amount per kilometre;

• The increased commuting allowance amount per kilometre eligible for the tax credit (after applying limitations);

• The number of kilometres commuted during the period 1 May 2026 to 31 July 2026 for which the increase was granted; and

• The amount of tax credit claimed.

Simplified reporting

When the increased allowance does not exceed the above-mentioned statutory cap of 20% or EUR 0.1 for all employees, employers may opt to report only the total amount of increased commuting allowances granted during the tax period, provided written evidence demonstrating compliance with the cap is added to the income tax return.

2026 tax year procedure

A royal decree will set out the format and required content of the form that employers must use to claim the tax credit for the 2026 tax year. The decree will also specify the deadline and procedure for submitting the form. Tax exemption in the hands of the employee

Tax exemption in the hands of the employee

The increased commuting allowance, limited to the amount of the tax credit, is tax-free in the hands of the employee.