Maintenance payments: Cash payments for relatives abroad deductible
Many foreign nationals in Germany provide financial support to their family members in their home country. The tax office imposes strict requirements on the proof of maintenance payments and the recipients' need. Transfers via intermediaries or transport companies are generally not recognised (BMF letter dated 7.6.2010).
An exception applies only in special cases, such as crises in the country of residence when no other payment method is possible. In these cases, the identity of the intermediary, the travel itinerary, and precise proof of the money transfer must be fully documented. This includes evidence such as tickets, fuel receipts, border crossing stamps, or flight tickets.
A 2016 ruling by the Baden-Württemberg Finance Court confirmed that maintenance payments to close relatives abroad – in this case to Italy – are tax-deductible. The court accepted the payments after the courier credibly confirmed as a witness that the money transfers were regular and trustworthy (FG Baden-Württemberg dated 21.7.2015, 8 K 3609/13).
In a 2022 decree, the Federal Ministry of Finance clarified the details of the tax deductibility of maintenance payments (BMF letter dated 6.4.2022, IV C 8-S 2285/19/10002 :001 and 10003 :001). The key points are:
- Proof of payments: Maintenance payments must be proven by bank or postal receipts that clearly identify the recipient. If several people in the same household are supported, it is sufficient if the receipts are issued to one person.
- Alternative payment methods: For payments to accounts not in the recipient's name, an additional bank certificate of account authorisation is required.
- Cash payments: These are possible, but strict proof requirements apply. In addition to withdrawal receipts and recipient confirmations, the transfer and the trip, which must not exceed two weeks, must be precisely documented.
- Family trips: Under certain conditions, trips by the taxpayer to their family abroad are tax-deductible. However, this does not apply if the spouse lives in Germany and only children or parents are visited abroad.
- Recipient confirmation: Each money transfer must be confirmed by a receipt issued immediately, containing the name, address, date, place of transfer, and the recipient's signature. Later confirmations are not accepted.
The deductible maintenance amount is up to 11.784 Euro per year (2024), with the recipient's own income over 624 Euro being deducted. In countries with a lower standard of living, the maximum amount is reduced by up to three-quarters.
Important: Maintenance payments can only be considered for tax purposes for the current year. For payments made during the year, the maximum amount is prorated over the year (BFH ruling dated 25.4.2018, VI R 35/16).
