Tax treatment of board directors – office staff, office space and cars

January 10, 2011

The regional finance office of Magdeburg submitted an order on how to deal with additional benefits provided to members of the supervisory board for tax purposes.

Occasionally, larger companies provide office space, office staff and company cars to their board of directors in addition to their cash remuneration.  The question arose as to whether the value of these goods and services needed to be considered as remuneration of the board of directors in terms of § 18 section 1 number 3 German Income Tax Act (EStG).

The decree clarifies the question of taxation for the following situations:

These guidelines apply to the taxation of the remuneration of the board of directors for the member of the board of directors but the ultimate treatment depends upon the precise individual circumstances.

Reference(s):

OFD Magdeburg, degree dated 03.08.2011 –S 2248 – 15 St 213

For further information or to discuss any of the issues raised, please contact Joachim Menz on +49 89 242230-0.

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