(2023) Business abroad: New travel allowances from January 2023

In 2023, new allowances apply for business-related foreign travel. Those undertaking foreign travel or work abroad for business reasons can deduct meal allowances as business expenses, which vary depending on the country and even specific cities. The same applies for extended work as part of maintaining a second household. Companies can also reimburse these allowances to their employees tax-free.

Overnight stays abroad cannot simply be deducted as business expenses using allowances. However, it is still possible for the employer to reimburse overnight costs up to the allowance amount tax-free.

The Federal Ministry of Finance has announced updated travel rates for a number of countries for 2023 (BMF letter dated 23.11.2022, IV C 5-S 2353/19/10010:004).

The tax-free payment of the overnight allowance by the employer is also permitted if you have actually incurred lower or no overnight costs, e.g. when staying with friends. However, if the actual overnight costs are higher, you can deduct the difference as business expenses.