Am I also entitled to the travel allowance if I use a company car?

You can also receive the travel allowance if you use a company car for commuting. However, you must note the following special features:

Even if your employer bases the calculation of the taxable benefit on the shortest route, you may still declare a longer route in your tax return if it is more convenient and you use it regularly.

For journeys between your home and primary workplace, you must pay tax on a surcharge in addition to the private usage value of 1 percent of the list price. This amounts to 0.03 percent of the list price per kilometre of distance for commuting each month.

In return, you may then, like any employee, claim the travel allowance of 0.30 Euro / 0.38 Euro per kilometre of distance as income-related expenses. If your employer taxes the taxable benefit for the company car at a flat rate of 15 percent, you must deduct the monthly flat-rate taxed amount from your income-related expenses and can only deduct the remainder as income-related expenses.

Even if the employer has only assumed 180 days for the calculation of the benefit value for simplification purposes, you can, for example, claim 220 days when deducting income-related expenses.

(2023): Am I also entitled to the travel allowance if I use a company car?

Which relocation expenses can I deduct?

In connection with the occupancy of the second home, you can deduct the actual costs incurred for tax purposes. This already begins with the house hunting: Expenses incurred in connection with house hunting, such as travel expenses for viewing properties, telephone or postage costs, are deductible as business expenses.

The tax office also recognises the costs for the move. You can deduct the costs of the removal company, expenses for a rental vehicle, helper wages or moving boxes. The estate agent's fee for obtaining the new rental property is also deductible, but not the estate agent's fee for purchasing a home at the place of employment. Please note that you must provide individual proof of your moving costs as part of the double household, as the moving expense allowance is not granted because you are not relocating your main residence. The deductibility of moving costs also applies to your return move to your main residence. If you need to carry out redecoration work when moving out of your second home, you can also include these in your tax return.

(2023): Which relocation expenses can I deduct?

How many trips home can I claim and for what amount?

If you maintain a dual household, you can also claim family journeys home for tax purposes, but only one journey per week is allowed. Per year, you can claim a maximum of 46 journeys home, as the tax office assumes 6 weeks of annual leave. However, please ensure you can provide evidence of these journeys if requested by the tax officer.

This can be done, for example, through train tickets or the mileage of your car. You can claim family journeys home for tax purposes using the distance allowance of 0.30 Euro per kilometre (0.38 Euro from the 21st km). The amount you can claim is not limited to the maximum amount of 4.500 Euro per year, as is the case for travel costs to the workplace.

If, for example, you are unable to make a journey home due to illness or a heavy workload, you can instead claim the costs of a 15-minute telephone call with your partner for tax purposes. If, for the same reasons, your family (spouse and minor children) visit you at your place of work, you can claim their travel costs as income-related expenses at the distance allowance rate.

However, this does not apply to the costs of accommodation and meals for the family. Costs for family journeys home by plane or paid group transport are recognised at the actual costs.

(2023): How many trips home can I claim and for what amount?

Can I claim expenses for "collective transport"?

Collective transport is provided when your employer provides a vehicle for travel between your home and workplace or when, for example, you travel by bus. Whether you can claim travel expenses depends on whether you actually incurred any costs or if the journeys were free of charge for you. If you did not make any contributions, you are not entitled to a travel allowance.

If you had to bear a share of the costs for the collective transport, you can claim this amount with proof. The travel allowance is not applicable here.

In 2021, the Federal Fiscal Court made a groundbreaking decision on the subject of "travel to the meeting point". According to this, if the meeting point is not typically visited on a daily basis, the journeys there can be deducted at business travel rates and not just with the commuter allowance (BFH ruling of 19.4.2021, VI R 6/19). In the underlying case, a construction machine operator was often deployed on multi-day remote construction sites. According to the BFH, this does not constitute a typical daily visit to the employer's meeting point. Consequently, the costs to the meeting point are to be considered at 30 cents per kilometre driven.

Recently, the Mecklenburg-Vorpommern Finance Court ruled that there are no journeys to the meeting point if a furniture fitter parks the company lorry at the roadside or in a - changing - public car park after work, drives home with his own car, and takes over the lorry again the next morning (ruling of 1.9.2022, 2 K 104/19).

(2023): Can I claim expenses for "collective transport"?

When should I provide proof of travel by public transport?

When using public transport, such as buses, trains, or trams, you can also claim the travel allowance of 30 cents per kilometre (or 38 cents from the 21st kilometre). This is generally beneficial, as the costs are usually lower. However, if the actual costs for public transport over the calendar year are higher than the travel allowance, you can claim these. The total deductible amount is limited to 4,500 Euro.

Mr X travels by train to his workplace on 230 days per year, which is 70 kilometres from his home. Mr X could claim the following costs as work-related expenses using the travel allowance:

• 230 days x 20 km x 0.30 Euro = 2,070 Euro plus
• 230 days x 50 km x 0.38 Euro = 4,370 Euro
• Total = 6,440 Euro.

Without proof and further explanations, only the maximum rate of 4,500 Euro would be recognised. However, with tickets and additional proof, Mr X can demonstrate the actual costs and receive a higher deduction for work-related expenses.

At the same time, you can use the tickets as proof of regular use of public transport if it does not take the shortest route to your workplace but is more convenient and faster. If you use a more convenient but longer route, it must be used regularly. You can prove this with tickets.

Tip: From the 21st kilometre, there is an increased travel allowance of 38 cents. This should primarily be applied to the part of the journey made with a privately owned or company car, as the maximum amount of 4,500 Euro does not apply to this. The travel allowance of 30 cents for the first 20 km should primarily be applied to the part of the journey using public transport.

(2023): When should I provide proof of travel by public transport?

How can I claim multiple weekly trips home?

As part of maintaining a second household, only one family journey per week is recognised as a deduction for work-related expenses. If you travel home more than once a week, you have an option:

• Either you claim one journey home per week and can also deduct accommodation costs and meal allowances for the first three months as work-related expenses for maintaining a second household.
• Or you can alternatively claim all journeys home using the distance allowance of 0.30 Euro per kilometre (0.38 Euro from the 21st km) as work-related expenses. These are considered journeys between the second home and the workplace. In this case, you cannot deduct overnight costs and meal allowances for the first three months.

The second option is advisable if you travel home frequently and have low overnight costs at your second residence. You should also note that for the second option, journeys not made with your own car can only be deducted up to a maximum of 4.500 Euro. You can exercise this option only once per calendar year for the same second household. If, for example, you change jobs and work locations within a year, a new second household is established, and you have a new option.

What costs can I claim for the first journey there and the last journey home?

As part of maintaining a second household, you can deduct the costs for the first journey from your main home to the second home and for the last journey home as work-related expenses.

The amount you can claim depends on the choice of transport:

• If you use your own car: 0.30 Euro per kilometre driven or km cost rate.
• If you use a motorcycle or scooter: 0.20 Euro per kilometre driven.
• If you use public transport (including flights): actual costs as evidenced.

(2023): How can I claim multiple weekly trips home?

Which accommodation expenses can I deduct?

As part of maintaining a second household, you can deduct the costs for overnight stays in your second home. Only proven costs are recognised, not flat rates. Any accommodation where you have the possibility to stay overnight is considered a second home. How often you use this possibility is irrelevant. Accommodations can include:

• a rented flat,
• your own house, or
• a hotel room.

If you use a rented flat at the second place of residence, you can claim the rent and ancillary rental costs such as heating or electricity for the second home. Expenses for necessary furnishings can also be deducted. These include, for example, a table, bed, wardrobe, or kitchen and bathroom furnishings. For purchase costs up to 800 Euro net, the amount can be deducted in full immediately; more expensive items must be depreciated over a longer period. For new furniture, the service life is 13 years. If you use a hotel as an overnight accommodation, you can deduct the actual proven overnight costs. If the overnight price includes catering costs and these are not shown separately, the deductible amount is reduced by the following items:

• by 20 percent for breakfast and
• by 40 percent for lunch or dinner of the meal allowance for 24-hour absence (28 Euro).

If you live in an owner-occupied flat, you can deduct your expenses (ancillary costs of the flat, interest on a mortgage loan, depreciation, etc.) up to the amount that a reasonable rented flat would cost.

For a second household in Germany, the deductible amount is limited to a maximum of 1.000 Euro per month. This maximum amount includes all expenses for the accommodation or flat that are borne by the employee, in particular rent including operating costs, also for a furnished flat, purchase costs for necessary household and furnishing items, second home tax, renovation, etc. The maximum amount of 1.000 Euro applies on a monthly basis and as an average value for the entire year. If the expenses are less than 1.000 Euro in some months and more than 1.000 Euro in other months, the excess amounts may be offset against the unused maximum amounts.

The Federal Fiscal Court has recently ruled against the tax authorities that the costs for the necessary furnishing of the second home as part of a work-related second household do not count as accommodation costs, the deduction of which is limited to 1.000 Euro per month. Rather, expenses for furnishings and household items - insofar as they are necessary - are fully deductible as other necessary additional expenses due to a second household in accordance with § 9 (1) sentence 3 no. 5 EStG (BFH ruling of 4.4.2019, VI R 18/17).

• According to the BFH, expenses for furnishings and household items are not covered by the maximum amount, as these are incurred only for their use and not for the use of the accommodation. The use of the furnishings is not the same as the use of the accommodation itself. The legislative aim of the new regulation is to limit only the costs for the accommodation to 1.000 Euro per month, but not other necessary expenses.
• The maximum deductible amount of 1.000 Euro per month includes, according to the explanatory memorandum to the law, "all expenses incurred for the accommodation or flat, e.g. rent including operating costs, rental or lease fees for parking spaces, also in underground garages, expenses for special use (such as garden, etc.) borne by the employee". The amount of 1.000 Euro is based "on a flat of approximately 60 sqm, which has always been used by the courts as a reference, depending on location and equipment".

If the second home is owned by the employee, the actual expenses, e.g. depreciation, interest on loans, operating costs, repair costs, can be deducted as income-related expenses up to the maximum amount of 1.000 Euro per month. Here too, the costs for necessary furnishings and household items can be deducted in addition to the maximum amount (BMF letter of 24.10.2014, BStBl. 2014 I p. 1412, para. 103).

When using a furnished or partly furnished flat, a higher rent is generally payable. If the rental contract does not include a breakdown of the rent for the use of the flat and the use of the furniture - as is usually the case - the rent paid can be apportioned on an estimated basis according to § 162 AO. The use of the flat is then deductible up to 1.000 Euro per month and the use of the furniture is deductible beyond that (BFH ruling of 4.4.2019, VI R 18/17).

The Saarland Fiscal Court has ruled that the costs for a rented parking space or garage are also not part of the accommodation costs and therefore do not fall under the 1.000 Euro limit. They can therefore be deducted even if the rent for the flat is already so high that the limit is exceeded (court order of 20.5.2020, 2 K 1251/17).

The tax authorities have recently announced a welcome simplification: If the acquisition costs for the furnishing and equipment of the second home - excluding work equipment - do not exceed a total of 5.000 Euro including VAT, it can be assumed for simplification purposes that these costs are considered "necessary" or not excessive and are recognised as income-related expenses without further examination (BMF letter of 25.11.2020, BStBl 2020 I p. 1228, para. 108).

The Munich Fiscal Court has recently ruled against the tax authorities that expenses for the second home tax are not part of the accommodation costs that can be recognised as income-related expenses up to a maximum of 1.000 Euro per month. Rather, the second home tax can be recognised additionally as "other expenses" in the context of a second household (FG Munich of 26.11.2021, 8 K 2143/21).

For a second household in Germany, the actual expenses for the accommodation are only deductible up to the maximum amount of 1.000 Euro per month (§ 9 (1) no. 5 EStG). The question is whether costs for energy, i.e. for electricity, heating and hot water, are also included in the 1.000 Euro limit. The question is not entirely clear. However, the Mecklenburg-Vorpommern Fiscal Court has issued a legally binding ruling stating (judgment of 21.9.2022, 3 K 48/22): "It therefore appears appropriate and in line with the purpose of the law to include only those costs in the 'accommodation costs' that are usually included in the calculation of an average gross cold rent and are therefore also covered by the flat rate of 1.000 Euro, which is intended to replace the calculation of the average rent. These are the monthly amounts for water, sewerage, street cleaning, refuse collection, house cleaning and lighting, chimney cleaning, caretaker, public charges, building insurance and cable connection. Surcharges for central heating, hot water supply, subletting and furniture are not included in the gross cold rent (Federal Statistical Office, http://www.destatis.de/Themen/Gesellschaft und Umwelt/Einkommen, Konsum und Lebensbedingungen/Bruttokaltmiete)." Conclusion: According to the Mecklenburg-Vorpommern Fiscal Court, the costs for heating and hot water in a second household are deductible without limit (unfortunately, the court does not explicitly comment on electricity costs, except for the costs for house lighting). However, it is questionable whether the tax authorities and the BFH share the view of the Mecklenburg-Vorpommern Fiscal Court.

(2023): Which accommodation expenses can I deduct?

What other costs are deductible for a second household?

If the conditions for maintaining a second household are met, various work-related expenses can be claimed for tax purposes. This begins with the search for accommodation. Expenses related to the search for accommodation, such as travel costs for viewing properties, telephone or postage fees, can be deducted as work-related expenses.

The tax office also recognises the costs for the move. These include, among others:

• Transport costs for a removal company or
• a rental vehicle and also
• travel expenses on the day of the move.

Furthermore, the rent and ancillary rental costs, such as heating or electricity, for the second home can be deducted. Expenses for necessary furnishings can also be deducted.

These include, for example:

• table,
• bed,
• wardrobe,
• kitchen and bathroom furnishings,
• dishes and pots,
• coffee machine,
• vacuum cleaner, as well as
• table and bed linen.

Also deductible are:

• second home tax,
• expenses for renovating the second home before moving in and when moving out, and
• damage costs resulting from an accident that occurs on a journey home.

For purchase costs up to 800 Euro net, the amount can be deducted in full immediately; more expensive items must be depreciated over a longer period.

(2023): What other costs are deductible for a second household?

Which route is relevant for the distance in kilometres?

The decisive factor for the distance is the shortest usable road connection between your home and your workplace. The key factor is not the "regular workplace" but the so-called "primary workplace" - a small but sometimes significant difference.

If you regularly use a longer but obviously more convenient route, the tax office is usually agreeable. A route is more convenient if you can reach your workplace faster and more punctually than via the shortest route.

Many tax offices will only accept a longer route if the time saving is at least 20 minutes per journey. However, this condition is not a criterion for rejecting a longer route. Rather, the time saving must be considered in relation to the total duration of the journey (BFH ruling of 16.11.2011, BStBl. 2012 II p. 520). This means:

• The time saving should be at least 10% of the travel time required for the shortest connection.
• A route can be "obviously more convenient" than the shortest connection, even without a time saving, if the longer route includes better roads, fewer traffic lights, fewer town crossings, less traffic, etc. Therefore, an "obviously more convenient" road connection may exist even if only a small or no time saving is expected, but the route proves to be more convenient due to other circumstances than the shortest connection.

Tip: If you take a longer route for health reasons, for example, because you cannot drive over a high bridge due to vertigo, the tax office must also accept this route. However, the travel costs cannot be deducted as extraordinary expenses, even if the medical officer has certified the anxiety (FG Hamburg of 24.3.2003, II 61/02).

If you use several means of transport for your commute (bicycle plus public transport), the shortest road connection is always used to calculate the allowance. Additional kilometres driven are not taken into account in this case. Furthermore, only full kilometres are taken into account, not partial kilometres.

Even if you have to make several trips to your workplace per day for work reasons, you can only claim the commuting allowance once per day. Trips for lunch are not deductible, as these trips fall within the realm of private life.

To relieve the burden on long-distance commuters, the commuting allowance was increased from the 21st kilometre, regardless of the means of transport used, as follows:

• from 1.1.2021 by 5 cents to 35 cents,
• from 1.1.2022 by a further 3 cents to 38 cents.

The increase is initially limited until 31 December 2026.

Mr X's workplace is 25 kilometres from his home via the shortest route. However, if he uses the expressway for his commute, he drives 17 kilometres more but saves 45 minutes of travel time.

Commuting allowance for 25 km route: 230 working days x 20 kilometres x 0.30 Euro = 1.380 Euro, plus 230 days x 5 kilometres x 0.38 Euro = 437.00 Euro; total = 1.817.00 Euro.

Commuting allowance for 42 km route: 230 working days x 20 kilometres x 0.30 Euro = 1.380 Euro; plus 230 days x 22 kilometres x 0.38 Euro = 1.922.80 Euro; total = 3.202.80 Euro.

In this case, you must explain the circumstances of the "detour" to the tax office and explicitly point out the time saving.

(2023): Which route is relevant for the distance in kilometres?