Tax relief for temporary workers

The number of temporary workers in Germany is rising. In the summer of 2016, the number surpassed one million. They may soon be better off tax-wise.

The one million employees of temporary employment agencies always have to expect to be reassigned to another job at short notice. Nevertheless, the tax office often assumes a permanent position and deducts fewer business expenses. This could change in the future, reports the Federal Association of Wage Tax Assistance Associations (BVL), which sued a temporary worker before the Lower Saxony Finance Court and won. The Federal Fiscal Court now has the final say on the issue of "business expense deductions for temporary workers."

Background

For travel expenses to the "primary place of work," only the travel allowance is deductible as business expenses. In other cases, travel expenses are taken into account. For car journeys, the allowance is €0,30 for each kilometer traveled, which is twice the amount of the travel allowance. In addition, meal allowances must be taken into account for the first three months.

The tax office has so far denied many temporary workers the higher deduction for business expenses because they assume they are permanently employed at a fixed location. "However, according to the legal regulations, this requires that the place of work is planned for the entire duration of the employment relationship, or more than 48 months in the case of permanent employment contracts," reports the BVL.

Appeal to the Federal Finance Court

"Temporary workers cannot prepare for such long-term assignments in one and the same position," the association says. The "Lohn- und Einkommensteuer Hilfe-Ring Deutschland" (German Wage and Income Tax Help Ring) has therefore filed a lawsuit in a specific case with the Lower Saxony Finance Court. The Finance Court ruled that temporary workers generally do not have a primary place of work (judgment of November 30, 2016; case number 9 K 130/16). The affected employee was granted a higher deduction for income-related expenses. The tax office has appealed this decision to the Federal Finance Court.

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Tip:

Affected temporary workers should file an objection to their tax assessment, citing the pending appeal, and request a suspension of proceedings. Uwe Rauhöft, Managing Director of the German Federation of Temporary Employment Agencies (BVL), sees a good chance that the Federal Fiscal Court will uphold the decision of the Lower Saxony Fiscal Court. Temporary workers should therefore document their travel expenses. Those who do not travel by car cannot claim a mileage allowance, but only the actual ticket costs.

outlook

As of April 1, 2017, due to a change in the Temporary Employment Act, assignments with the same employer must be limited to a maximum of 18 months. For all employees whose employment relationship does not end after these 18 months, travel expenses must be taken into account for tax purposes from the outset.