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

Posted on 3rd January, 2010

Estimated reading time 2 minutes

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