Is a travel allowance taxable
Travel expenses include travel expenses, subsistence expenses (the so-called additional subsistence expenses), accommodation expenses and incidental travel expenses. These costs can be taken into account for tax purposes as business expenses in the income from non-self-employed work (= the employer does not assume the costs) or as business expenses if they are caused by the employment or service relationship.
If a trip is both professional and private, the travel costs can be divided into a professional and a private part. The professional part is then deductible as income-related expenses or business expenses. In the case of a subordinate operational / professional co-cause (<10%), the expenses are not fully deductible as business expenses / advertising expenses. In the case of a subordinate private co-cause (<10%), the expenses are fully deductible as operating expenses / advertising expenses (Federal Fiscal Court, decision of September 21, 2009, GrS 1/06; Federal Ministry of Finance, letter of 6 July 2010, IV C 3 - S 2227 / 07/10003: 002).
Example of the breakdown of travel expenses into private and professional parts:
A general practitioner attends a specialist conference in London. He arrives Saturday morning. The event takes place all day from Tuesday to Thursday. He travels back home on Sunday evening. The costs for 2 overnight stays (from Tuesday to Thursday) as well as the congress fees are exclusively assigned to the operational area and can therefore be fully deducted as business expenses. The flight costs are incurred in a mixed manner and divided according to the incidental contributions. The appropriate proportion of the time is the ratio of the business and private time parts of the trip (business-related 3/9). A deduction of the meal costs as operating expenses is only permissible in the amount of the lump sums for additional meal expenses for the operational days.
The following can be deducted as travel expenses:
The actual costs for using public transport can be used. If the private vehicle is used for the journey, the flat rate or the individual kilometer rate can be used.
Evidence of the actual costs must be provided.
Only meal allowances can be applied.
Expenses incurred through the trip but not allocated to travel, food or accommodation costs are incidental travel costs.
The following expenses could be ancillary travel costs: baggage costs (transport, storage, luggage insurance), expenses for long-distance calls and for correspondence with the employer, road usage costs (tolls, ferry costs, parking costs), costs incurred as a result of a traffic accident, fees for (work-related) foreign assignments your own credit card.
An input tax deduction for travel expenses is possible. It is assumed that the employer / entrepreneur is the recipient of the service and also has a proper invoice (small amount invoice). The input tax deduction is excluded for the meal allowance and the kilometer allowance.
If other people are taken on a business-related trip for private reasons, accident costs incurred in connection with private fellow travelers are not operating expenses (Federal Fiscal Court, judgment of 1.12.2005, IV R 26/04).
Laws and Judgments (Sources)
BFH 9/21/2009, GrS 1/06
BMF 6.7.2010, IV C 3 - S 2227/07/10003: 002
Section 9 of the Income Tax Act
Section 4 (4) of the Income Tax Act
R 9.4 ff. LStR
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