Constitutional challenge to time limit for tax deductible subsistence expenses fails

Posted on 4th January, 2011

Estimated reading time 2 minutes

The German Federal Finance Court confirms that deductions for meal allowances is limited to 3 months.

Where employees are working away from their usual place of work, for example at a client’s premises or if they are on secondment to a Group employer they may claim travel expenses and also subsistence meal allowances as a deduction against income on a per diem basis according to published rates. 

In general under the German constitution costs relating and incurred in earning income are deductible for tax assessment purposes.  Refusal to follow this rule by the courts must be based upon a reasoned justification.  In this case
The German income tax act limits the subsistence meal allowance deduction to a maximum 3 month period on the basis that within such period the employee should be able to make other arrangements to reduce the additional meal expenses to nil.  In this case an employee on secondment challenged the three month limit on the basis that the constitution should allow employees a full deduction in such circumstances where they incur additional costs as a result of having to maintain two households in order to carry out such duties away from the employee’s main place of work. 

However, the court rejected the claim on the basis that the 3 month limit was sufficient for such an employee to make alternative arrangements to eradicate such additional expenses.


The decision of the German Federal Finance Court fails to reflect that, in practice, these additional subsistence costs continue to be incurred after the arbitrary 3 month period allowed.


German Federal Finance Court: Decision dated 08 July 2010 (VI R 10/08)

For further information or to discuss the issues raised, please contact Joachim Menz on +49 89 24 22 300