Today, we start our new series giving you insights into the German tax system. Our first article deals with home office expenses:
Home office room: For multiple use of the maximum amount as well as deduction in case of usage for various incomes
If a person has no other office apart from a home office, in order to fulfil their job and occupational duties, they can claim tax benefits for the expenses of up to 1250 Euro’s according to German tax law (1§ 4 para. 5 Sentence 1 no. 6b Satz 3 first half of sentence EStG)
If the home office is used for multiple occupations, for example engaging in a side-line activity as a self-employed person as well as working in a dependent employment, the amount cannot be claimed multiple times for each of these occupations.
It is also not possible according to the “Bundesfinanzhof” (Federal Finance Court, Germany) to split this amount between the different types of income by forming sub-amounts (BFH, judgement of. 25.04.2017, VIII R 52/13, DStR 2017,p. 1693, LEXinform 0929833). Instead what has to be done is that the expenses for the home office have to be assigned pro rata to the different types of employment. The expenses that can be claimed can therefore be deducted up to the maximum amount (1250 Euro).
If a person has multiple home offices in different flats or houses then only up to 1250 Euro can be claimed in total (BFH, judgement of. 09.05.2017, VIII R 15/15, DStR 2017,p. 1581, LEXinform 0950321)
The expenses can be deducted up to the maximum amount if the home office is the centre of the business and vocational activities (§ 4 para. 5 Sentence 1 no. 6b Sentence 3 second half of sentence EStG).