What applies to business trips abroad?
There are some special tax regulations for off-site work abroad:
(1) Meal allowances: These vary depending on the country. Special rates are set for particularly expensive cities. The allowances are derived from the Federal Travel Expenses Act and are announced by the Federal Ministry of Finance from time to time.
- For each full day of absence, the country-specific meal allowance is 120%, and
- on days with an absence of more than 8 hours as well as on
- arrival and departure days, it is 80% of the highest foreign daily allowances.
(2) In-flight meals: In-flight meals are usually included in the airfare. If the invoice for the flight ticket is issued to the employer and reimbursed by them, the following applies:
The free in-flight meal is considered a "meal provided by the employer". This means that the meal allowance must be reduced by 40% for lunch or dinner and by 20% for breakfast. The meal allowance is not reduced if it is clear from the chosen fare that it is a pure transport service with no free meals provided.
(3) Multiple countries: If you visit several countries during your off-site work, the meal allowance is always based on the country you reach last before 24:00 local time. On the return day, the country in which you were last working is decisive - not Germany. This also applies if you continue your off-site work in Germany, for example, by visiting a customer in Germany.
(4) Overnight allowances: For overnight stays abroad, the country-specific overnight allowances can no longer be deducted as business expenses, but only reimbursed tax-free by the employer. If the off-site work abroad lasts longer than four years, there is no limit on the deductible accommodation costs to 1.000 Euro per month for the 48 months, unlike in Germany.
The Federal Fiscal Court (BFH) has ruled that employees without a fixed first place of work must also reduce the meal allowances if the employer provides them with free meals (judgment of 12.07.2021, VI R 27/19).
The case: A ship's officer received free meals on board from the employer, which were shown as tax-free benefits in the payroll statements. On port days, the officer did not always use the on-board meals and occasionally had to provide for himself. He claimed meal allowances as business expenses for a total of 206 days.
The judgment: The BFH ruled that the officer may only claim the meal allowances for days on which he did not receive meals from the employer, such as on port days. On the other days, when breakfast, lunch, and dinner were provided free of charge, the deduction of the meal allowances is excluded.
The Düsseldorf Fiscal Court ruled that free meals provided to flight personnel on flights of over six hours are not taxable wages (judgment of 13.08.2020, Az: 14 K 2158/16 L).
Background: An airline provided its staff with free meals on longer flights. The tax office considered this to be taxable wages, but the court rejected this. The meals were provided predominantly in the employer's operational interest to ensure smooth flight operations.
Conclusion: The provision of meals primarily serves the employer's legal obligation and not the reward of the staff. Therefore, they are tax-free.
