A business trip is associated with one thing, the incurrence of certain costs. It is important to know that some expenses related to such a trip can be claimed in the annual tax return, thus reducing the amount of tax to be paid. In which cases is it possible to deduct the costs of business trips in Germany from taxes? We’ll explain it in our article today, please read on!
Business trip or what type of trip is it?
When can you say that a trip was for business purposes? Such trips can be a visit to a business partner in another city or a trip to a conference (in another city in Germany or another country). Of course, every such trip costs money, fuel or flight costs, accommodation or meals are just examples of expenses incurred during the trip. If the trip was conducted for business purposes, you can deduct these expenses from taxes by declaring them as travel expenses in your tax return. How can you do this? You will learn this in the following sections.
Find out if your German employer has covered your travel expenses
You should first find out if your employer in Germany has covered the costs of your business trip. This is very important in connection with a possible VAT deduction. Remember that once your boss has paid the invoices, you can no longer include them in your tax return.
It’s different if your employer has only covered part of the costs of your business trip in Germany. In this case, you can deduct the additional expenses incurred by the trip by documenting this to the tax office (while indicating both your share and the employer’s share). Of course, only what you have paid out of your own pocket is deductible.
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However, if your boss has not reimbursed your costs in any way, you are entitled to deduct all your travel expenses.
What travel expenses can you deduct from taxes in Germany?
If you have met the requirements for the tax deduction of business travel expenses in Germany, we can address which expenses you can declare in your annual tax return. These fees that you can deduct for business trips include:
- Travel costs,
- Meal expenses,
- Accommodation costs,
- Additional travel expenses.
Important: In your tax return, you can declare your expenses in two ways: with the actual costs incurred or with a flat rate.
Travel costs in Germany
For the costs of a business trip in Germany, it is first necessary to distinguish between the means of transport used. The tax deduction is not applicable if a company vehicle was used for the journey. However, if you traveled by public transport or a taxi and kept your receipts/tickets, you can claim the deduction.
You can also use your own vehicle when on a business trip. In this case, you are entitled to a travel allowance. This currently looks as follows:
- Car – 30 euro cents/kilometer,
- Motorcycle/Scooter – 20 euro cents/kilometer,
- Moped or electric bicycle – 20 euro cents/kilometer.
Are your business travel costs in Germany over 30 cents per kilometer? If you can prove this thoroughly, you can offer a higher rate. However, keep in mind that in this case, you will need to determine the total annual costs for your vehicle. This is often difficult to achieve (all annual vehicle receipts and the logbook serve as proof).
Costs for additional meals during a German business trip
The assumption of the legislator that the employee is forced to spend more money on meals during a German business trip than would be the case at home is obvious. These expenses are therefore tax deductible. These are lump sums with different values (depending on how long you were on a business trip).
Since the reform of travel expenses in Germany in 2014, two flat rates have been introduced, which were increased a year ago in 2020.
If your business trip lasts several days, you can deduct €28 for each working day in your tax return.
If it is a one-day trip (at least 8 hours but not more than 24 hours), you can deduct €14 (until 2019 it was €12). This amount also applies to arrival and departure days for multi-day trips.
Accommodation costs in Germany
A longer business trip in Germany leads to the need to rent a hotel room. Accommodation costs are also deductible – in this case, they must actually be incurred. Important: Meals are not included in the price. If you receive an invoice, the amount for breakfast, lunch, or dinner must be deducted.
However, if this is not possible (the hotel invoice shows a single amount, i.e., the cost for accommodation + meals), you must reduce this amount by the following rates:
- Breakfast – a deduction of €5.60 (20% of the per diem)
- Lunch and dinner – a deduction of €11.20 (40% of the per diem)
Important: If you work as a truck driver, you can claim a deduction for organizing your own accommodation. The flat rate is €8.
Additional travel costs in Germany
You need to know that you can also claim a number of other expenses related to German business trips in your tax return. What else can you deduct? The additional costs include:
- Tickets for events (fairs, conferences),
- Toll fees,
- Parking fees,
- Tickets for public transport,
- Car rental costs,
- Taxi ride,
- Costs for luggage storage,
- Travel insurance.
In addition to the classic business travel expenses, employees in certain industries should also pay attention to additional deductible items. In construction, roofing, scaffolding, and landscaping, the winter construction levy is an important item of deductible expensesthat should be entered in annex N of the tax return. This levy is deducted monthly from the gross salary and can significantly reduce the tax burden.
Tax deductibility of travel expenses in Germany – Summary
As you have already learned from today’s post, bearing the costs does not have to be so painful. It’s worth knowing what and in which cases you can deduct. Finally, a little advice: even if you mainly use flat rates, you should keep all receipts and invoices so you don’t have to worry. They are proof that you incurred business travel expenses in Germany, and there is a possibility that they may need to be presented to the German tax authorities.
Do you need help with your tax return? Or do you have questions, such as about declaring reimbursed travel expenses in the tax return? Use Taxando, a modern application for the German tax return. Our software analyzes your situation in detail, so you can quickly and conveniently submit the correct tax return to the relevant tax office. If you choose the PREMIUM package, you can also count on the support of an experienced tax advisor. Do you still have questions? Contact us – Taxando.
Maciej Wawrzyniak
In his private life, Maciej enjoys sporting challenges, playing the guitar, and swimming in the lake. He is also the proud father of three sons.
