Work-related allowances in German taxation

18th Sep 2020

Foreigners can deduct some work-related expenses from their taxes. Does this apply to you?

An employee normally has the main household where his center of life is. However, expats who start working in Germany may keep the main household in their home country and this especially happens if the family stays back home. This situation leads to two households. The good thing is that those expenses for the German household are tax deductible.

Double household

A double household is work-related. This means that the employee has his (main) household in one place, is working at another place, and lives at the place of occupation. Not only married but a single person can also have a double household if he keeps his center of life at the home town.
Expenses to deduct:

  • Housing costs up to 1000 € a month like rents or associated costs of a house or flat (electricity, heating, water) at the place of occupation or work in Germany.
  • Traveling expenses for going home as one trip home per week are deductible with € 0.30 per kilometer for the distance between household and place of occupation. This means that only € 0.15 for traveling there and back can be deducted.

For example:

If you work in Berlin and your main household is abroad in Prague, 350 km far away, you can deduct 350 x 0.30 = 105 € for one way home and (or) 350 x 0.15 = 52.5 € for the way back.

  • Alternatively, real costs for public transportation (flights or trains) can be deducted.
  • Daily allowance for costs of meals in the first three months away from their own household, the employees can deduct € 24 a day.
  • Relocation expenses including furniture and furnishings. The costs (1622 € for married and 811 € for a single in 2019) of moving from home to second home must be proven by bills or invoices.

By filing the tax return and claiming these allowances the employee has to prove by documents that the legal requirements of a double household are met. Singles or married employees must prove their household in their hometown or home country which is the center of life. These documents can be:

  • ownership of a flat or house,
  • rental agreement,
  • mortgage,

or whatever it could verify the main household. Important that they must be officially translated into German.

If you worked in Germany and need to file a tax return, you can use our application for filing a tax return in Germany.

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