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A healthcare professional has enquired whether a geographical dispersion allowance, intended to compensate for the use of a private vehicle during home visits, is exempt from tax. The Directorate General for Taxes (DGT) has ruled that it may be exempt provided the limits and conditions set out in the Income Tax Regulations are met.
This ruling clarifies the tax treatment of allowances for travel expenses, potentially reducing the tax burden for professionals who use their own vehicles for work-related mobility, provided strict regulatory criteria are satisfied.
The tax team reviews your specific situation.
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