Save on taxes – New regulations regarding working from home

In its ruling of February 22, 2017, the Federal Fiscal Court (BFH) decided that self-employed persons can deduct a home office from their taxes under certain circumstances, even if another workplace is available.

The plaintiff was a self-employed speech therapist who worked in two rented practices and employed four people. The tax office rejected his claim for a home office expenses after an on-site inspection, citing the existing workspaces in the practices.

The speech therapist filed a lawsuit arguing that the workstations in his practices were used exclusively by his employees and that he himself had no dedicated workspace for administrative tasks. Since the practice rooms were used for therapy, it was impossible to perform office work there during working hours. Furthermore, the practices were located a considerable distance from his home. Therefore, he argued, it was unreasonable to expect him to travel these distances outside of opening hours to perform office work. The practice rooms were also unsuitable for the necessary office work. There were no cabinets on site to secure sensitive data. Therefore, the speech therapist stated, he needed a home office.

Conclusion: Whether the criterion "no other workplace" is met must therefore be decided based on the circumstances of the individual case and depends on the nature and location of the premises in the practice or business. In this case, the Federal Fiscal Court (BFH) ruled (against the appeal of the tax office) that a deduction for business expenses limited to €1,250 is justified.

The German property owners' association Haus & Grund Deutschland points out another recent change in tax law: If spouses or partners share a home office because no other workplace is available, each of them can now deduct up to €1,250 in business expenses from their taxes. Previously, if both partners used the home office due to the lack of another workplace (which is often the case for teachers, for example), the maximum deductible amount was €1,250 in total, meaning up to €625 for each partner if they used the room equally.

With the new regulation, based on the judgments of December 15, 2016 (VI R 53/12 and VI R 86/13), the Federal Fiscal Court is departing from its previous case law, which focused on the object itself. The background to the amendment is the increasing number of self-employed individuals and families who have to reconcile work and private life.

Incidentally, tenants can also claim their expenses on a personal basis: the basis is the rent payment, half of which can be attributed to the spouse or life partner.

If the home office is the center of all professional activity for one or both spouses, advertising expenses or business expenses can of course still be fully deducted for tax purposes.

Sources: Haus & Grund Deutschland, immonewsfeed.de, haufe.de, arbeitsrechte.de, juris.bundesfinanzhof.de, lohnsteuer-kompakt.de, steuertipps.de