German Tax Updates in July 2024
- If the Distance is too Short for Double Housekeeping
- Input Tax Refund Procedures: Submit Applications by 30 September 2024
- Sales Tax: How Donations in Kind are Treated
- Wage Tax: Home Office Generally does not Constitute a “Permanent Establishment” of the Employer
- Salary-Benefit: How to Save a Lot of Tax with a Job Bike
- Inflation Compensation Premium: Tax-Free Payment is Still Possible Until the End of 2024
- If the Distance is too Short for Double Housekeeping
Even though the home office plays an important role in many industries, the labor market expects a certain degree of flexibility. However, sometimes the distance between home and the workplace is too great to commute every day. In this case, it is often easier to rent a flat around the place of work. The costs of this can be recognized as income-related expenses up to a certain limit.
The interesting question is: How far does the distance to the main residence have to be? The Münster Tax Court (FG) had to rule on such a case recently.
The plaintiffs were a husband and wife who have a joint household in city S. The plaintiff has been the managing director of “H” GmbH & Co KG in city E since August 2018. The distance between the home in city S and the workplace in city E is 30 km. In February 2020, the plaintiff rented a second home in city E approximately 1 km from his place of work. He had previously rented a holiday flat in city D. Among other things, he claimed the rental costs in city D and city E, relocation costs from city D to city E and other costs associated with these flats. He also had a company car at his disposal, also for the use of private journeys. Private use was taxed according to the 1% rule. The tax office did not recognize the costs claimed for double housekeeping. It was reasonable to expect the claimant to travel the distance between his main residence and place of work by car every day.
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