Germany: Travel costs – welcome new rule on mixed business/non-business expenses

January 3, 2010

Clarification of treatment of travel costs with both a business and
private element

Travel costs with business and private elements may be split into
deductible business costs and non- deductible private costs, provided
that both elements of the costs can be identified and the business part
is not insignificant.


This decision has been long awaited and it brings welcome
clarification of the treatment of travel costs with business and private
elements.  It revises the opinion of the Federal Finance Court made in
1970 and removes the strict and general prohibition (stipulated in § 12
No. 1 EStG) on deduction of expenses with a mixed element (business and
private).  Until now, travel costs with any level of mixed elements were
not deductible, even where some of those costs were incurred for
business purposes.

The costs are apportioned between business and private use, in
proportion to the time spent on the trip for business and private
purposes. In its decision, the Court expressly stipulates that detailed
and formal documentation of the journey is a requirement for a deduction
of travel costs to be allowable for tax purposes.


German Federal Finance Court: Decision dated 21.09.2009 (GrS 1/06)

For further information or to discuss any of the issues raised,
please contact Joachim Menz (
on +49 89 24 22 30 0.

This article was produced by, and re-produced with kind permission
of, our correspondent firm in Germany, Keller Menz Rechtsanwälte.

Keller Menz


CELIA Alliance
CELIA Alliance members are identified here. Members of the CELIA Alliance are each independent law firms and do not practice law jointly with any other member of the CELIA Alliance. “CELIA Alliance” and “CELIA” are not trading names. For more information about the CELIA Alliance click here.

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this newsletter. For further legal information click here.

If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.

Leave a Reply

Your email address will not be published. Required fields are marked *