(2023)
Which accident-related costs can I deduct?
If you have an accident during a work-related journey, you can claim the resulting costs as business expenses in your tax return. In addition to accident costs, you can also claim other expenses if your car is damaged or stolen. You can claim, for example, the following expenses:
- Repair costs
- Car hire costs
- Theft of car radio
- Compensation payments for third-party damage
- Costs for experts, lawyers, and courts
- Recovery costs
- Towing costs
- Expenses for trips to the garage, expert, etc.
If you receive a reimbursement from a third party, you must deduct it from your accident costs if you receive the reimbursement in the year of the accident or the year the accident costs were paid. If you receive the reimbursement later, you must declare it as income. The tax office usually requires the following evidence:
- Accident location and time
- Police report of the accident
- Proof of insurance benefits
- Witnesses, if applicable
- Invoices showing the amount of repair costs
In 2019, the Federal Fiscal Court ruled against taxpayers, stating that the commuting allowance covers all expenses. This includes accident costs, insofar as they are expenses incurred by the employee for "the journeys between home and first place of work", i.e., actual travel costs (BFH ruling of 19.12.2019, VI R 8/18). This means that accident costs for commuting accidents are not actually deductible as business expenses. However, there is a very interesting instruction from the tax authorities that those affected should definitely be aware of.
Currently, due to the negative BFH ruling, the Federal Ministry of Finance has made it unequivocally clear in a new decree that accident costs incurred on a journey between home and first place of work or on a family journey home in the case of double housekeeping are still deductible alongside the commuting allowance as extraordinary expenses within the framework of general business expenses according to § 9 Abs. 1 Satz 1 EStG. This means that the above-mentioned negative BFH ruling is outdated! More precisely, it is not applied (BMF letter of 18.11.2021, IV C 5 -S 2351/20/10001 :002, Tz. 30).
