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A dean of a professional association has enquired whether a travel allowance of €0.40/km is subject to personal income tax (IRPF) withholding. The Directorate General for Taxes (DGT) has ruled that if it cannot be proven that the amount strictly compensates for the expense, or if a flat rate is paid, it is considered employment income.
This ruling clarifies that travel reimbursements must strictly correspond to actual costs to avoid being reclassified as taxable employment income, affecting how professional bodies manage expense claims.
The tax team reviews your specific situation.
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