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This is what the government proposed in its bill submitted to the parliament in early May. The intention is that people who drive their private car for work purposes will receive greater tax relief through a new travel deduction and increased mileage allowance as early as 2023.
The background to the proposal is that fuel prices have risen sharply recently and there are many people living in car-dependent areas where fuel prices are particularly high. Driving your own car for business purposes has become a losing proposition in recent years as the tax-free mileage allowance has been left untouched since 2007. At the time when the current mileage allowance was decided, the price of petrol was around SEK 11.65 per liter, compared to the current price of SEK 21.73 per liter (19/5/2022).
You can calculate your mileage allowance for 2022 here.
Many have criticized the fact that the mileage allowance has not been adjusted for 15 years despite the increase in costs. This has led Ronny Svensson, founder of Ynnor Tjänstebilsförlaget, to launch the milersättningsuproret.
Among the proposals put forward are
- The current travel allowance is replaced by a distance-based tax reduction. What this means is that the tax reduction will be calculated on the distance between home and work instead of the cost of the journey and it will not matter which means of transport was actually used for the work trip.
- The upper distance limit and mileage rate is increased from 8 to 12 mil. Currently, the travel allowance only applies to journeys between 3 and 8 mil, which affects people with longer journeys.
- The mileage rate is increased from SEK 5 to SEK 8 per mil.
- The standard amount that can be deducted for the cost of travel by private and company car for business and home travel is increased from SEK 18.50 to SEK 25 per mil.
- The deduction for fuel for business travel by company car is increased from SEK 6.50 and SEK 9.50 to SEK 12 per mil.
- Benefit vehicles powered solely by electricity will have their deduction reduced from SEK 9.50 to SEK 6 per mil.
Read more on the government website under ‘Questions and answers’.
It is estimated that around 1,160,000 people will be eligible for the tax credit in 2023, which is around 260,000 more than the current travel tax credit.
The changes are proposed to enter into force on January 1, 2023 and are estimated to reduce tax revenues in the public sector by approximately SEK 4.5 billion per year.
