How can I deduct the premiums for my car insurance?
Contributions to motor liability insurance can be declared in the tax return; they are deductible as special expenses under pension expenses. However, the portion of the premium relating to comprehensive insurance is not recognised by the tax office.
The reason: Only policies that cover the taxpayer's personal life risks are considered and thus fall under the category of "other pension expenses". Partial or fully comprehensive insurance, on the other hand, is considered property insurance. Therefore, comprehensive cover cannot be deducted by private individuals for tax purposes.
Anyone who wants to declare at least the portion for motor liability insurance in their tax return has two basic options.
Deduct motor insurance premium as special expenses or business expenses
Contributions to motor liability insurance are generally special expenses if they are neither business expenses nor business-related expenses.
If you use the vehicle for journeys between your home and primary workplace and for journeys home as part of maintaining a second household, and you settle these journeys for tax purposes using the travel allowance, the travel allowance also covers the proportional liability insurance premium. However, the tax authorities are generous here: You are allowed to deduct the insurance premium in full as special expenses for simplification purposes (R 10.5 EStR).
(2022): How can I deduct the premiums for my car insurance?
How to claim hospitality expenses as income-related expenses for tax purposes!
Employees are generally reimbursed for the costs of entertaining clients on behalf of their employer. However, this may differ if the employee receives performance-related payments, for example.
As a general rule: Costs incurred by an employee for entertaining guests on the occasion of a personal event (birthday, promotion, anniversary, etc.) are considered non-deductible private expenses according to established case law. The Federal Fiscal Court (BFH) has ruled that the occasion of the event should not be the sole decisive factor, but that other circumstances should also be considered as part of an overall assessment (judgment of 11 January 2007 VI R 52/03).
For the professional or private nature of the entertainment expenses, it is also important, for example, where the event takes place, who acts as host, who determines the guest list, and whether the guests are colleagues, business associates, press representatives, or private acquaintances or relatives of the taxpayer.
Thus, the BFH refers to aspects on the expenditure side that it has developed on the income side for the distinction between taxable wages and benefits in the employer's own business interest.
Electronic cash registers are subject to special recording and security obligations to prevent manipulation. The so-called Cash Register Security Ordinance requires that issued receipts must contain a transaction number and the serial number of the electronic recording system or the serial number of the security module. Although the Federal Ministry of Finance (BMF) stipulates that the deduction of income-related expenses or business expenses by the customer should not be cancelled if the information required by the Cash Register Security Ordinance is missing from the invoice, a transitional regulation applies until 31 December 2022. However, since the new security features are mandatory when using electronic cash registers, we believe that customers should already ensure that the entertainment receipts they receive are provided with the relevant information, possibly in the form of a QR code.
If the restaurant (inn, bistro, bakery, cafe, snack bar) does not have an electronic cash register: The Berlin-Brandenburg Fiscal Court has recently ruled against the tax authorities that handwritten invoices are formally sufficient as entertainment invoices; the invoice from the restaurateur does not need to be machine-printed. Consequently, such entertainment expenses are also 70 percent deductible. There is no legal basis for the tax office's assumed requirement for a machine-printed invoice (Berlin-Brandenburg Fiscal Court of 8 November 2021, 16 K 11381/18).
Note: Trust is good, control is better. Check that you have actually received the final receipt and not an "interim invoice", a "waiter's receipt" or similar. Only the final receipt is recognised by the tax office.
(2022): How to claim hospitality expenses as income-related expenses for tax purposes!
Are occupational insurance policies considered income-related expenses?
The maximum amount for special expenses is usually already exhausted by other insurance policies. For this reason, it is advisable to claim all work-related insurance not covered by the employer as income-related expenses.
In practice, a deduction in the area of income-related expenses is mainly possible for liability, accident, and legal expenses insurance (possibly proportionately).
(2022): Are occupational insurance policies considered income-related expenses?
Can I declare the costs for a solicitor in the tax return?
Legal fees incurred in connection with earning income can be claimed as income-related expenses in the tax return.
Two examples:
- If, for example, an employee takes legal action against their dismissal, the legal fees are considered income-related expenses for income from employment.
- If the owner of a rented property takes legal action against a tenant for not leaving the property in proper condition, these costs can be deducted as income-related expenses for income from renting and leasing.
No income-related expenses are incurred if the costs for the legal dispute or lawyer are reimbursed by legal expenses insurance.
(2022): Can I declare the costs for a solicitor in the tax return?
How is the winter employment levy taken into account?
Employees in the construction industry are entitled to seasonal short-time work benefits during the bad weather period. Eligible employees include those from construction companies, scaffolding trades, roofing trades, and landscaping. In addition to seasonal short-time work benefits, commercial employees may receive additional benefits under collective agreements, such as the winter allowance and the winter expense allowance. These additional benefits are financed through a levy (known as the winter employment levy).
Employee contributions to the winter employment levy are deductible as income-related expenses. The levy is calculated from taxable and social security liable wages and deducted from net wages. Generally, the employer has listed them separately in the income tax statement. Enter these amounts in "Anlage N" under other income-related expenses.
(2022): How is the winter employment levy taken into account?
