In Luxembourg, the tax deductible travel and accommodation expenses reimbursed to employees who incurred them whilst travelling on business are based on the following principles:
- The expenses may be either actual expenses incurred, with receipts, or lump sum expenses;
- The lump sum expenses allocated to employees may not exceed the reimbursements received by a Luxembourgish civil servant in the same situation;
- The allowances must be proportional to the actual expenses. They may under no circumstances constitute disguised remuneration.
The reimbursement of actual expenses backed by receipts requires no particular comments.
The lumped sum allowances, on the other hand, are strictly circumscribed in Luxembourg and explained below.
Lump sum reimbursement of travel expenses for business trips
Travel expenses refer to all costs incurred by the employee in the performance of his occupational tasks, i.e. transport and ancillary costs. The following are generally accepted:
- Train: 1st class
- Plane: in Europe, economy; outside Europe, business class
- Employee’s personal vehicle: €0.30 per kilometre irrespective of the mileage covered and the cylinder capacity of the car
Lump sum reimbursement of accommodation expenses for business trips
The lump sum reimbursement of accommodation expenses for business (per diems) includes a day allowance and a night allowance. The amounts of per diems depend on the country where the employee travels.
The day allowance covers all the employee’s meals when travelling on business. It is granted per full day commenced during which the employee is travelling. No receipt is required for the allocation of this allowance.
The night allowance covers the price of the hotel room, breakfast, tipping and all related charges. Although it is a lump sum allowance, the full night allowance can be allocated only upon production of a receipt for the expenses incurred. In the absence of a receipt, only a partial allowance, equal to 20% of the full allowance, may be granted with exemption of taxes and social security charges.
A few examples of the amounts of day and night allowances are provided below:
| Country/City | Day allowance | Night allowance |
|---|---|---|
| Luxembourg | €14 | €56 |
| Belgium | €50 | €160 |
| Brussels | €60 | €250 |
| France | €60 | €200 |
| Paris / Strasbourg | €60 | €320 / €240 |
| United Kingdom | €70 | €200 |
| London | €90 | €280 |
| Germany | €60 | €195 |
| Berlin / München | €60 | €220 |
For countries holding the Presidency of the Council of the European Union, the ceiling amounts of the night allowance are increased by 10 per cent for the duration of the Presidency.
The information published in this article is valid only on the date of publication of said article. Pursuant to Article 2, §2 of the Act of 10 August 1991, as the Legal Department of SECUREX Luxembourg SA is not authorised to practice law, it shall limit its action at all times to disseminating information and documentation. Such documentation and information thus provided always constitute typical examples or summaries, are of indicative value, and lay no claim to being exhaustive. The addressee is solely responsible for the use and interpretation of the information or documentation referred to in this article, advice or acts he deduces as well as the results he obtains from them.
