How are car pools treated for tax purposes?

If you were a carpool participant, the commuter allowance for passengers is generally limited to a maximum of 4,500 Euro. However, this limit does not apply to days when you used your own car.

Therefore, provide the relevant details separately for the days you drove your own car and for the days you were a passenger. The following applies to determining the distance: Each carpool participant enters the shortest usable road connection as the distance between home and first place of work / meeting point / large-scale work area; detours to pick up passengers are not taken into account.

Special regulation for spouses / civil partners:
Spouses / civil partners who travel to work together are each entitled to the commuter allowance individually. This applies even if they work for the same employer.

(2023): How are car pools treated for tax purposes?

What is the travel allowance?

For the commute between home and primary workplace, you can claim a travel allowance (commuter allowance) as work-related expenses, regardless of how you travel to your primary workplace. This allowance is 30 cents for each full kilometre of distance, or 38 cents from the 21st kilometre onwards.

For the calculation of the distance between home and primary workplace, the shortest road route is generally decisive. It does not matter which means of transport you actually used. If you use a car, you can enter a route other than the shortest road route if it is obviously more convenient and you regularly used it for the commute between home and primary workplace.

Please note that only the one-way and shortest route to the workplace is considered as work-related expenses. This means not the return journey, and not multiple trips per day.

The travel allowance is generally limited to a maximum amount of 4,500 Euro. However, if you use your own car or a car provided for your use (e.g. company car), the maximum amount of 4,500 Euro does not apply.

The travel allowance can be claimed for the commute to the primary workplace only once per working day, even if you make the journey between home and primary workplace several times a day.

(2023): What is the travel allowance?

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 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?

What is the non-assessment limit?

Many tax officials may deny their existence. And taxpayers cannot rely on benefiting from them, as there is no legal entitlement to the non-detection limit.

Non-detection limits are amounts – usually small – in the tax return that tax officials generally do not scrutinise closely and accept without proof.

Here are some examples:

• Working days for travel allowance: For a 5-day week, you can claim 230 working days per year, and for a 6-day week, 280 days.
• Work-related items: You can usually claim costs up to 110 Euro for the purchase and maintenance of work-related items (purchase and cleaning of work clothing) in your tax return without receipts.

Journeys to the primary workplace can be deducted in your tax return (Form N) using the commuter allowance. You must specify the exact number of days you actually travelled to work, as the allowance only applies to these days. Holiday and sick days must also be stated. Since 2020, business travel days and home working days are recorded in Form N.

Calculating the exact number of working days can be tedious. To make things easier for you, tax offices have previously set so-called non-detection limits. For a five-day week, this was 220 to 230 journeys, and for a six-day week, 260 to 280 journeys between home and workplace. However, these limits are internal and not legally binding. A court ruling stated that tax offices should accept 230 days (FG Munich of 12.12.2008, 13 K 4371/07).

But the pandemic changed everything. Many employees worked and still work from home and do not commute daily. For these days, you can claim a flat rate of 5 Euro per day as work-related expenses or even the costs for a home office. However, you cannot claim travel expenses as no journeys take place.

Tax offices increasingly require an employer's certificate of the actual working days and especially the days on which the primary workplace was visited. The rule of 220 or 230 journeys per year no longer applies automatically!

(2023): What is the non-assessment limit?

How is the primary place of work defined?

The primary place of work is the fixed business facility of the employer, an affiliated company, or a third party designated by the employer to which you are permanently assigned by the employer.

The permanent assignment is determined by the service or employment regulations and the agreements or instructions issued by the employer. A permanent assignment is particularly assumed if you are to work indefinitely, for the duration of the employment relationship, or for a period of 48 months.

If there is no permanent assignment or if it is not clear, the primary place of work is the business facility where you are typically required to work on a daily basis, two full days per week, or at least one-third of your agreed regular working hours on a permanent basis. There can be a maximum of one primary place of work per employment relationship.

(2023): How is the primary place of work defined?

What can be deducted for employees without a primary place of work?

Some employees do not have a "main place of work" and must report to a fixed meeting point on the instructions of their employer. From there, they begin their work or travel to the work location.

Such meeting points might be a car park or vehicle depot for lorry drivers, coach drivers, bus drivers, tram drivers, taxi drivers, train drivers, train attendants, etc., who always take over their vehicle at the same location.

What is tax deductible?

• Journeys between home and the "meeting point" can only be deducted using the commuter allowance.
• Despite the commuter allowance, you can still deduct meal allowances as business expenses. Since there is no main place of work, you are working away from home. No main place of work is assumed here, only the application of the commuter allowance is required. There is no three-month limit, as each journey counts as a new business trip.

Lorry drivers can claim an overnight allowance of 8 Euro per calendar day as business expenses - in addition to the "normal" meal allowance. This applies to the day of arrival or departure and every calendar day with an absence of 24 hours during a business trip in Germany or abroad (Section 9 (1) sentence 3 no. 5b EStG, introduced by the "Act on Further Tax Promotion of Electric Mobility and Amendment of Other Tax Regulations").

The Federal Fiscal Court has recently ruled that the operational area of a works railway driver constitutes a main place of work and not an extensive work area (BFH ruling of 1.10.2020, VI R 36/18).

Similarly, paramedics and postal workers do not work in an extensive work area for tax purposes but have a main place of work (BFH ruling of 30.9.2020, VI R 11/19; BFH rulings of 30.9.2020, VI R 10/19 and VI R 12/19).

The Federal Fiscal Court has recently ruled that the depot is not the main place of work for a refuse collector if they only listen to the tour instructions, collect the tour book, vehicle documents and keys, and check the vehicle lights (BFH ruling of 2.9.2021, VI R 25/19). This means refuse collectors can claim additional meal expenses of 14 Euro per day for tax purposes if they are away from home for more than eight hours. They do not need to be away from the depot for more than eight hours.

(2023): What can be deducted for employees without a primary place of work?

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?

What is a collective point?

If there is no main place of work and the employer requires the employee to be present permanently - typically on a daily basis - at a specified location (e.g. the bus depot, the employer's premises, a car park) to start work or visit work sites from there, the employee's journeys from home to this meeting point are treated as journeys to a main place of work, i.e. only considered with the travel allowance.

The Federal Fiscal Court recently made an interesting decision on the subject of "journeys 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 travel allowance (BFH ruling of 19.4.2021, VI R 6/19).

Even if the journeys can only be deducted with the travel allowance, meal allowances and accommodation costs can still be deducted as business expenses or reimbursed tax-free. This is because you are still working away from a main place of work.

No main place of work is assumed here; only the application of the travel allowance is prescribed and tax-free employer reimbursement is excluded (BMF letter of 24.10.2014, BStBl. 2014 I p. 1412, para. 39).

(2023): What is a collective point?

What is an extensive work area?

A large-scale work area exists when the contractually agreed work is to be performed over a specified area and not within a fixed business location of the employer, an affiliated company, or at a third party designated by the employer.

If the employee (e.g. a forestry worker) is typically required to perform their work on a daily basis in a large-scale work area, the employee's journeys from home to the nearest access point of the large-scale work area are treated as journeys to a first place of work, i.e. taken into account with the distance allowance. If the large-scale work area is always accessed from different entry points, the distance allowance for these journeys is only applicable for the shortest distance from home to the nearest access point.

Expenses for travel within the large-scale work area and for additional kilometres when travelling from home to a more distant access point should be entered in the "Travel expenses" section. Instead of the actual expenses incurred, the following flat rates per kilometre driven can be claimed:

• 30 cents for cars,
• 20 cents for other motor vehicles (e.g. motorbikes, scooters).

The Federal Fiscal Court has made clear distinctions in several recent rulings regarding the definition of the first place of work:

1. Industrial railway train drivers:

The Federal Fiscal Court ruled that the work area of an industrial railway train driver is considered the first place of work and not a large-scale work area (BFH ruling of 1.10.2020, VI R 36/18).

2. Paramedics and postal workers:

It was also determined that paramedics and postal workers do not have large-scale work areas in the tax sense, but each have a first place of work (BFH ruling of 30.9.2020, VI R 11/19; BFH rulings of 30.9.2020, VI R 10/19 and VI R 12/19).

3. Refuse collectors:

The Federal Fiscal Court decided that the depot is not the first place of work for a refuse collector if they only perform administrative tasks there, such as collecting documents and checking vehicles (BFH ruling of 2.9.2021, VI R 25/19).

This allows refuse collectors to claim daily meal allowances of 14 EUR for tax purposes if they are away from home for more than eight hours, without being away from the depot for more than hours.

4. Dock workers:

In another ruling, the Federal Fiscal Court decided that a dock worker does not work in a large-scale work area if they are assigned to specific work locations within the Port of Hamburg (BFH ruling of 15.2.2023, VI R 4/21).

Additionally, the Lower Saxony Finance Court clarified that the entire area of the Port of Bremerhaven does not constitute a large first place of work unless the employer uses it in its entirety for the work (Lower Saxony FG, ruling of 2.9.2022, 4 K 149/21).

(2023): What is an extensive work area?

What can be deducted for an extensive work area?

If you work in a large-scale work area (e.g. factory, exhibition, barracks, airport, shipyard premises), the question is whether the entire area is considered your "first place of work" or if you work at multiple locations and therefore engage in off-site work.

A large-scale work area exists if the contractually agreed work is performed over a specified area and not within a fixed business facility of the employer.

What is tax deductible?

• The nearest work site within the large-scale work area is considered the "first place of work" and allows for the deduction of the distance allowance (30 cents per kilometre; 38 cents from the 21st kilometre).
• All other journeys within the large-scale work area can be deducted with the business travel allowance (30 cents per kilometre driven) or the actual costs, or reimbursed tax-free.
• Absences of more than 8 hours allow for the deduction of meal allowances or tax-free reimbursements, with no time limit (no three-month rule).
• If a company car is used for journeys to the nearest work site, a surcharge value must be taxed as wages (monthly 0.03% of the list price per kilometre). For other journeys, no taxation of the usage value is required, but no deduction of income-related expenses is possible either.

According to the Federal Fiscal Court ruling of 1.10.2020, VI R 36/18, the work area of a works railway driver is considered the first place of work, not a large-scale work area.

Both paramedics and postal workers are not considered to be working in a large-scale work area for tax purposes, but each have a first place of work, as stated in the Federal Fiscal Court rulings of 30.9.2020, VI R 11/19, VI R 10/19 and VI R 12/19.

In a recent decision, the Federal Fiscal Court ruled that a depot is not considered the first place of work for refuse collectors if only administrative tasks such as listening to instructions from the tour management, collecting tour books, vehicle documents and keys, and checking vehicle lighting are carried out there (Federal Fiscal Court ruling of 2.9.2021, VI R 25/19).

The Federal Fiscal Court recently decided that a dock worker does not work in a large-scale work area if they are assigned to specific locations within the Port of Hamburg (Federal Fiscal Court ruling of 15.2.2023, VI R 4/21). Similarly, the Lower Saxony Finance Court ruled that the area of the Port of Bremerhaven is not considered a large first place of work if it is partially used by the employer but does not serve the employer's activities as a whole (ruling of the Lower Saxony Finance Court of 2.9.2022, 4 K 149/21).

(2023): What can be deducted for an extensive work area?

What is "collective transport"?

If you were transported free of charge or at a reduced rate by your employer to the first place of work / meeting point / extensive work area (collective transport), you cannot claim a travel allowance for the distance of the collective transport.

However, if you paid a fee to your employer for the collective transport, please enter the expenses under "Other income-related expenses".

(2023): What is "collective transport"?

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"?

Can ferry costs be claimed for tax purposes?

For employees who use a ferry connection to travel to work, the ferry route must not be included in the distance. Therefore, the commuter allowance cannot be claimed for this part of the journey. However, the full ferry costs can be deducted as business expenses. Enter these expenses in Form N under "other business expenses".

(2023): Can ferry costs be claimed for tax purposes?

How can ferry costs be claimed for tax purposes?

For employees who use a ferry connection to travel to work, the ferry route must not be included in the distance. Therefore, the travel allowance cannot be claimed for this route. However, the ferry costs can be fully deducted as business expenses. Enter these expenses in Form N under "other business expenses".

You have a route of 16 kilometres, but travel 1 kilometre of it by ferry. Then enter 15 kilometres for the calculation of the travel allowance and enter the total ferry costs incurred for the tax year under ferry expenses.

(2023): How can ferry costs be claimed for tax purposes?

How can flight costs be claimed for tax purposes?

If you commute by plane, you must calculate the travel expenses as follows:

• For the travel allowance, claim the distance between your home and the departure airport plus the distance between the destination airport and your workplace.
• You can also declare the expenses for your flight tickets in your tax return.

You live in Bonn and work in Berlin. It is 9 kilometres from your home to Bonn Airport and 6 kilometres from Berlin Airport to your employer. You can therefore claim 15 kilometres for 230 days as part of the travel allowance.

Additionally, you pay 66 Euro per day for your flight ticket.

In total, you incur 1.035 Euro for 230 days as part of the travel allowance plus 15.180 Euro for the flight tickets.

(2023): How can flight costs be claimed for tax purposes?

Are motorway tolls also deductible?

Travel between home and work can be deducted for tax purposes using the commuting allowance. In 2014, the former term "regular workplace" was replaced by "primary workplace". The commuting allowance is available to you regardless of the means of transport used. The commuting allowance covers all expenses incurred for travel between home and the primary workplace.

Toll fees for using motorways or tunnels are also covered by the commuting allowance and cannot be deducted additionally. For the calculation of the commuting allowance, the shortest road connection must be used, even if it is subject to tolls (BFH ruling of 24.9.2013, VI R 20/13).

The shortest road connection is 9 km and goes through a toll tunnel. An employee wants to save the toll and therefore takes a federal road with a distance of 27 km.

Unfortunately, this employee may only claim a commuting allowance for 9 km as work-related expenses.

(2023): Are motorway tolls also deductible?