What should I know about the new 48-month limit?
What should be considered regarding the 48-month limit for off-site work?
For off-site work, travel, accommodation, and incidental travel expenses, as well as meal allowances, can be deducted as business expenses. Since 2014, the 48-month limit has played a central role.
1. 48-month limit at the first place of work
A "first place of work" is a fixed business location to which the employee is permanently assigned. A permanent assignment is assumed if the employee:
- is assigned indefinitely ("until further notice"),
- for the entire duration of the employment relationship, or
- for a period of more than 48 months
Tip: If the assignment is limited to up to 48 months, there is no first place of work. Therefore, travel costs can be claimed according to business travel allowances, and meal and accommodation costs can be claimed as business expenses or reimbursed tax-free.
2. 48-month limit for work at a customer's premises
Under the new law, the first place of work can also be at a customer's premises, for example, in long-term projects or temporary work. Such an assignment exists if the employee:
- is assigned from the outset for longer than 48 months, or
- for the entire duration of the employment relationship
3. 48-month limit for accommodation costs
Since 2014, accommodation costs for off-site work can only be fully deducted for 48 months. From the 49th month, they are limited to 1.000 Euro per month – but only for domestic work.
Tip: An interruption of the activity for at least six months resets the 48-month period.
Important case law
The Münster Finance Court ruled that repeatedly limited assignments of less than 48 months each do not constitute a first place of work, even if the total deployment lasts longer than four years (Münster Finance Court, 25.3.2019, 1 K 447/16).
Special conditions for temporary agency workers
Temporary agency workers are in an employment relationship with the lender, not the borrower. They can only have a first place of work if they are:
- assigned indefinitely,
- for the duration of the employment relationship, or
- for longer than 48 months
Journeys to the first place of work can only be deducted using the distance allowance. Meal and incidental travel expenses are not applicable. For shorter assignments, however, reimbursement can be made according to travel cost principles.
The Lower Saxony Finance Court ruled that travel costs can only be deducted using the distance allowance, even for fixed-term assignments (ruling of 28.5.2020, 1 K 382/16). However, the Federal Fiscal Court overturned this ruling (Federal Fiscal Court ruling of 12.5.2022, VI R 32/20). The decisive factor is the employment relationship between the temporary agency worker and the lender. Repeated fixed-term assignments do not constitute a permanent assignment.
Changes due to the Temporary Employment Act (AÜG)
Since 1.4.2017, a temporary agency worker may be employed by the same borrower for a maximum of 18 months (§ 1 para. 1b AÜG). The question arises as to whether this regulation has tax implications for the assessment of the first place of work. The Federal Fiscal Court will decide on this in case VI R 22/23.
Those affected should appeal against negative tax assessments and apply for the suspension of the proceedings.
