Are accident costs covered by the travel allowance?
Can accident costs be deducted in addition to the travel allowance?
In principle, the travel allowance covers all "ordinary" travel costs between home and the primary workplace (§ 9 para. 2 sentence 1 EStG). These include:
- Petrol, tyres, inspections
- Car insurance and tax
- Depreciation and repairs due to normal wear and tear
- Parking fees during working hours
- Garage rent, financing costs, leasing down payment
- Contributions to motorist associations, passenger accident insurance
- Replacement engine
But what about extraordinary costs – e.g. in the event of an accident?
Accident costs: Exception despite travel allowance?
There is often debate about whether accident costs can be deducted as business expenses in addition to the travel allowance. The tax authorities' answer is clear:
“Accident costs incurred on a journey between home and primary workplace or on a family journey home to be taken into account are to be considered as extraordinary expenses within the framework of general business expenses according to § 9 para. 1 sentence 1 EStG in addition to the travel allowance.”
(BMF letter dated 31.10.2013, BStBl. 2013 I p. 1376, no. 4)
The explanatory memorandum to the law on the amendment of § 9 para. 2 EStG from 2007 also confirms this view (BT-Drucksache 16/12099 dated 03.03.2009, pages 6 and 8).
Income tax guidelines clearly regulate exceptions
According to the income tax notes (note 9.10 LStH 2018), only certain accident costs may be considered in addition to the allowance:
- Accident on direct route to work
- Accident on a detour to refuel
- Accident on a detour to pick up carpool members
Government: No legal differentiation – but equity regulation
“The travel allowance covers all expenses incurred by the employee for journeys between home and primary workplace. A differentiation between ordinary and extraordinary expenses is not provided for in the wording of § 9 para. 1 sentence 3 no. 4 sentence 2 EStG. For reasons of equity, however, the administration does not object if expenses for the repair of accident damage in a traffic accident are claimed as business expenses in addition to the travel allowance.”
(BT-Drucksache 18/8523 dated 20.05.2016, page 35)
BFH ruling 2019: Bad news – but overturned
The Federal Fiscal Court (BFH) ruled on 19.12.2019 (VI R 8/18) that the travel allowance generally also covers accident costs incurred on the way to work.
However, the Federal Ministry of Finance disagrees with this view and states in the BMF letter dated 18.11.2021:
Accident costs incurred on journeys between home and primary workplace or on a family journey home in the case of double housekeeping are still deductible as extraordinary business expenses in addition to the travel allowance according to § 9 para. 1 sentence 1 EStG.
Which accident costs are additionally deductible?
- Vehicle repair costs
- Treatment or alleviation of physical injuries
- Replacement of damaged clothing, glasses, etc.
- Rental of a replacement vehicle
- Legal costs
- Third-party damage
The cause of the accident (own fault, third parties, natural events) is irrelevant.
Special conditions for people with disabilities
For people with a degree of disability (GdB):
- from 70 or
- 50–70 with the mark “G” or “aG”
applies: They may alternatively apply the business travel allowance of 30 cents per kilometre travelled or the actual km cost rate. Accident costs are also additionally deductible (BMF letter dated 31.08.2009, BStBl. 2009 I p. 891).
Special cases: Accident costs on detours
- Accident on detour to refuel (BFH ruling dated 11.10.1984, BStBl 1985 II p. 10)
- Accident when picking up passengers (BFH ruling dated 11.07.1980, BStBl 1980 II p. 655)
- Accident on journey to station to buy tickets (BFH ruling dated 04.07.1986, VI R 18/83)
Tip: Be cautious about going to court
There is no legal entitlement to the recognition of accident costs. In court, judges are bound by the law and BFH case law – not by administrative regulations.
Although a so-called self-binding of the administration may apply, this is assessed differently (e.g. Lower Saxony FG, ruling dated 28.01.2020, 12 K 213/19; BFH dated 03.07.2019, VI R 49/16).
Recommendation: Contact the tax office early or involve the department head instead of going straight to court.
Are accident costs covered by the travel allowance?
When can I deduct accident costs?
You can deduct the costs of an accident as business expenses if the damage occurred during a work-related journey. Work-related journeys include, for example:
- Journeys between home and workplace
- Business trips or off-site work
- Journeys as part of maintaining a second household
- Journeys during a work-related move
- Journeys during professional training
The question of fault is not relevant for the deductibility of accident damage. This also applies if you have to pay a fine as a result of the accident. However, the misconduct must be within the scope of the professional objective, and alcohol must not be involved.
In 2019, the Federal Fiscal Court ruled against taxpayers, stating that the commuting allowance covers all expenses. This means that accident costs are also covered, insofar as they are expenses incurred by the employee for "the journeys between home and first place of work", i.e., actual travel costs (BFH ruling of 19.12.2019, VI R 8/18). This means: Accident costs for commuting accidents are actually not deductible as business expenses. Actually, because there is a very interesting instruction from the tax authorities that those affected should definitely be aware of.
Currently, due to the negative BFH ruling, the Federal Ministry of Finance makes it unequivocally clear in a new decree that accident costs incurred on a journey between home and first place of work or on a family journey home in the case of a second household are still deductible in addition to the commuting allowance as extraordinary expenses within the framework of general business expenses according to § 9 para. 1 sentence 1 EStG. This means the above-mentioned negative BFH ruling is outdated! More precisely, it is not applied (BMF letter of 18.11.2021, IV C 5 -S 2351/20/10001 :002, para. 30).
When can I deduct accident costs?
Which accident-related costs can I deduct?
If you have an accident during a work-related journey, you can claim the resulting costs as business expenses in your tax return. In addition to accident costs, you can also claim other expenses if your car is damaged or stolen. You can claim, for example, the following expenses:
- Repair costs
- Rental car costs
- Theft of car radio
- Compensation payments for third-party damage
- Costs for experts, lawyers, and courts
- Recovery costs
- Towing costs
- Expenses for trips to the garage, expert, etc.
If you receive a reimbursement from a third party, you must deduct it from your accident costs if you receive the reimbursement in the year of the accident or the year the accident costs were paid. If you receive the reimbursement later, you must declare it as income. The tax office usually requires the following evidence:
- Accident location and time
- Police report of the accident
- Proof of insurance benefits
- Witnesses, if applicable
- Invoices showing the repair costs
In 2019, the Federal Fiscal Court ruled against taxpayers, stating that the commuter allowance covers all expenses. This includes accident costs, as long as they are expenses incurred by the employee for "commuting between home and primary workplace", i.e., actual travel costs (BFH ruling of 19.12.2019, VI R 8/18). This means: Accident costs for commuting accidents are not actually deductible as business expenses. However, there is a very interesting instruction from the tax authorities that those affected should definitely be aware of.
Currently, due to the negative BFH ruling, the Federal Ministry of Finance has made it unequivocally clear in a new decree that accident costs incurred on a journey between home and primary workplace or on a family home trip in the case of double housekeeping are still deductible as extraordinary expenses within the framework of general business expenses according to § 9 Abs. 1 Satz 1 EStG, in addition to the commuter allowance. This means the aforementioned negative BFH ruling is outdated! More precisely, it is not applied (BMF letter of 18.11.2021, IV C 5 -S 2351/20/10001 :002, Tz. 30).
Which accident-related costs can I deduct?
