Accident costs covered by the travel allowance?
The law stipulates that "the travel allowance covers all expenses incurred for travel between home and the primary workplace" (§ 9 para. 2 sentence 1 EStG). This includes all "ordinary" costs, such as expenses for fuel, tyres, inspections, car insurance, car tax, depreciation, garage rental, repairs due to normal wear and tear, parking fees for parking the car during working hours, financing costs, membership fees for motoring associations, insurance premiums for passenger accident insurance, special leasing payments, replacement engines. Does this also apply to "extraordinary" costs such as accident damage?
A recurring issue is whether the costs of an accident are covered by the travel allowance or whether they can be deducted as business expenses in addition to the actual amount.
The tax authorities have repeatedly instructed tax offices: "Accident costs incurred on a journey between home and the primary workplace or on a family commute to be taken into account are to be considered as extraordinary expenses within the framework of general business expenses according to § 9 para. 1 sentence 1 EStG in addition to the travel allowance" (most recently BMF letter dated 31.10.2013, BStBl. 2013 I p. 1376, no. 4).
The explanatory memorandum to the amendment of § 9 para. 2 EStG from 2007 also states that "accident costs are to be considered as extraordinary expenses in addition to the travel allowance" (BT-Drucksache 16/12099 dated 3.3.2009, pages 6 and 8).
Furthermore, the income tax guidelines explicitly state that "in addition to the travel allowance, only expenses for the repair of accident damage in a traffic accident on a journey between home and workplace, on a detour to refuel the vehicle, on a detour to pick up carpool passengers" are taken into account (note 9.10 LStH 2018).
In addition, the Federal Government recently stated: "The travel allowance covers all expenses incurred by the employee for their journeys between home and primary workplace. A distinction between ordinary and extraordinary expenses is not provided for in the wording of § 9 para. 1 sentence 3 no. 4 sentence 2 EStG. For reasons of fairness, however, the administration does not object if expenses for the repair of accident damage in a traffic accident are claimed as business expenses in addition to the travel allowance" (BT-Drucksache 18/8523 dated 20.5.2016, page 35).
Currently, the Federal Fiscal Court has ruled against taxpayers that the travel allowance in principle also covers accident costs, insofar as they are expenses incurred by the employee for "the journeys between home and primary workplace", i.e. actual travel costs (BFH ruling dated 19.12.2019, VI R 8/18).
The Federal Ministry of Finance has now made it unequivocally clear in a new decree, due to the negative BFH ruling: Accident costs incurred on a journey between home and primary workplace or on a family commute in the case of double housekeeping are still deductible as extraordinary expenses in addition to the travel allowance within the framework of general business expenses according to § 9 para. 1 sentence 1 EStG. This means that the aforementioned negative BFH ruling is outdated! More precisely, it is not applied (BMF letter dated 18.11.2021, IV C 5 -S 2351/20/10001 :002, para. 30).
Accident costs that can be taken into account in addition to the travel allowance include both expenses related to the vehicle and expenses related to the repair or alleviation of physical injuries. Furthermore, expenses for all other consequential damages caused by the accident that have no connection to the vehicle used or the route, e.g. rental of a replacement vehicle, legal costs, damage to private items (clothing, glasses), third-party damage. For the deduction, it is generally irrelevant whether the accident was caused by a natural event, the behaviour of a third party or one's own fault.
Note: Years ago, the tax authorities repeatedly instructed tax offices: "Accident costs incurred on a journey between home and primary workplace or on a family commute to be taken into account are to be considered as extraordinary expenses within the framework of general business expenses according to § 9 para. 1 sentence 1 EStG in addition to the travel allowance" (most recently BMF letter dated 31.10.2013, BStBl 2013 I p. 1376, no. 4).
Disabled persons with a degree of disability (GdB) of at least 70 or a GdB of 50 to 70 and the mark "G" or "aG" can claim their journeys to work with the business travel allowance of 30 cents per kilometre travelled or with the actual km cost rate. They can also deduct accident costs as business expenses (BMF letter dated 31.8.2009, BStBl. 2009 I p. 891, para. 3).
In addition to the travel allowance, accident costs can also be deducted as business expenses,
- if the accident occurs on a detour to refuel the vehicle (BFH ruling dated 11.10.1984, BStBl 1985 II p. 10),
- if the accident occurs on a detour to pick up carpool passengers, regardless of the carpool arrangement. This is possible, although no travel allowance can be claimed for the detour routes to pick up and drop off passengers (BFH ruling dated 11.7.1980, BStBl 1980 II p. 655),
- if the accident occurs on the way to the station to buy a monthly or annual ticket for public transport (BFH ruling dated 4.7.1986, VI R 18/83).
