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German Tax Updates in September 2024

1. How to Deduct the Home Office Per Diem Correctly
2. Income Limit of the Entitlement to Parental Allowance Drops to €200,000 Per Year
3. Child Benefits are Paid Retroactively Only for Six Months
4. Wage Tax for Unpaid Bonuses of a Sole Shareholder and Managing Director

1. How to Deduct the Home Office Per Diem Correctly

Working from home does not only save time to commute to work but also saves your tax. From 2023, employees can deduct up to €1,260 per year for working from home in their income tax returns even though they have an alternative workplace at their employer’s premises.

A daily allowance of €6 per day can be claimed for a maximum of 210 days per year regardless of whether work is done at home at the kitchen table or at a desk. However, the lump sum is only available for days on which you spend more than half of your working time in your home office and do not visit a primary place of work outside your home. Nevertheless, if these conditions are met, employees may also attend appointments away from home in between their working hours at home. For example, if an employee works at home for five hours and has a business meeting outside the company for two hours in the afternoon, they can still claim the daily allowance of €6 for this day. 

German Tax Updates in July 2024

1. If the Distance is too Short for Double Housekeeping
2. Input Tax Refund Procedures: Submit Applications by 30 September 2024
3. Sales Tax: How Donations in Kind are Treated
4. Wage Tax: Home Office Generally does not Constitute a “Permanent Establishment” of the Employer
5. Salary-Benefit: How to Save a Lot of Tax with a Job Bike　
6. Inflation Compensation Premium: Tax-Free Payment is Still Possible Until the End of 2024

1. 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. 

ASTHOM PARTNERS Welcomes UK-based Greenback Alan LLP as a New Member

ASTHOM PARTNERS Welcomes UK-based Greenback Alan LLP as a New Member

~ Providing Services Across 13 Countries and 35 Locations Worldwide ~

On June 19, 2024, the UK accounting firm Greenback Alan LLP (HQ: Spa Road, London; Managing Partner: Stephen Dabby) joined the global accounting network “ASTHOM PARTNERS”. With this addition, the member firms of ASTHOM PARTNERS now include AGS Consulting Co., Ltd. (HQ: Chiyoda-Ku, Tokyo; Chairman: Atsushi Kanzawa, President: Yoshihide Hirowatari, hereinafter “AGS”), Hotta Liesenberg Saito LLP (HQ: Torrance, California; Global CEO: Shunsuke Saito, hereinafter “HLS”), and Greenback Alan LLP.

German Tax Updates in March 2024 

1. Uncertainties regarding Real Estate Transfer Tax have been eliminated 

2. Shareholder Managing Director : Private Use of Company Car is to be assumed

3. Meals from the Employer as Non-Cash Benefits will apply from 2024

4. New Income Limits for Parental Allowance (Elterngeld)

German Tax Updates in January 2024

1. Update in Mandatory Electronic Invoicing.

2. Gastronomy from 1st January, 2024: VAT Rate jumps back to 19%.

3. Private use benefit from company cars: Changing the calculation method can save taxes.

4. Due to increase in the annual income threshold as of 1st January, 2024: Reassess public health insurance obligation.

5. Low-value assets.

6. Special depreciation according to Section 7g Individual Tax Law.

German Tax Updates in November 2023

1. Improvement in company car taxation of electric vehicles planned from 2024.

2. BFH decision on non-cash benefits from company car hire.

3. Loss from the sale of significant shares of GmbH.

4. BFH ruled on the legal situation related to GmbH insolvency.

5. Treatment under income tax related to subsequent payment of social security contributions by means of a summation notice.

Provisional and conditional agreement on the CBAM

The Council of the European Union reached a provisional and conditional agreement on the Carbon Border Adjustment Mechanism (CBAM) regulation.  CBAM was proposed by the European Commission („EC”) in July 2021 to prevent the risk of carbon leakage. The products of the following sectors will be covered by CBAM; iron and steel, cement, fertilizers, aluminium, electricity, and hydrogen, as well as some precursors and a limited number of downstream products. Indirect emissions would also be included in the regulation in a well-circumscribed manner. 

Negotiation position on the corporate sustainability due diligence directive was adopted by Council of the European Union

On December 1, 2022, the Council of the European Union adopted its negotiation position on the corporate sustainability due diligence directive. 

Similar regulations of supply chain due diligence have been enacted or implemented in multiple member states, such as Germany and France.  This directive will unify, if it would be implemented, supply chain acts regulations of the Member states. 

CSRD was approved by the Council of the European Union

On November 28, 2022, the Council of the European Union approved the corporate sustainability reporting directive („CSRD“). There have been no significant updates from the version which was provisionally agreed upon by the Council and European Parliament in June 2022. 

HLS Global and AGS Consulting Establish Joint Venture

A partnership created to empower Japanese companies to expand globally

Torrance, CA, U.S.A. / Tokyo, Japan:

On December 6, 2022, Hotta Liesenberg Saito LLP (HLS) and AGS Consulting Co., Ltd. (AGS) announced the establishment of a joint venture to provide a wide range of support services to Japanese companies expanding globally. In announcing this significant partnership, the two companies are sharing their vision, spirit, and resources while fully committed to the growth and success of all our clients.