Can the costs for furnishing the flat be deducted additionally?
In the context of an occupationally related second household, accommodation costs or second home costs can also be deducted as business expenses or reimbursed tax-free by the employer. Only proven costs are recognised, not flat rates. But what about newly purchased furnishings?
The Federal Fiscal Court has recently ruled against the tax authorities, stating that the costs for the necessary furnishing of the second home in the context of an occupationally related second household are not part of the accommodation costs, the deduction of which is limited to 1.000 Euro per month. Rather, expenses for furnishings and household items - insofar as they are necessary - are fully deductible as other necessary additional expenses due to a second household in accordance with § 9 para. 1 sentence 3 no. 5 EStG (BFH ruling of 4.4.2019, VI R 18/17).
- According to the BFH, expenses for furnishings and household items are not covered by the maximum amount, as these are incurred only for their use and not for the use of the accommodation. The use of furnishings is not the same as the use of the accommodation itself. The legislative aim of the new regulation is to limit only the costs for the accommodation to 1.000 Euro per month, not other necessary expenses.
- The maximum deductible amount of 1.000 Euro per month includes, according to the legislative reasoning, "all expenses incurred for the accommodation or apartment, e.g. rent including operating costs, rental or lease fees for parking spaces, also in underground garages, expenses for special use (such as garden etc.) borne by the employee". The amount of 1.000 Euro is based "on an average apartment of approx. 60 sqm, as previously always used by case law, depending on location and equipment".
(1) If the second home is owned by the employee, the actual expenses, e.g. depreciation, interest on loans, operating costs, repair costs, are deductible as business expenses up to the maximum amount of 1.000 Euro per month. Here too, the costs for necessary furnishings and household items are deductible in addition to the maximum amount (BMF letter of 24.10.2014, BStBl. 2014 I p. 1412, para. 103).
(2) When using a furnished or partly furnished apartment, a higher rent is generally payable. If the rental contract does not specify a breakdown of the rent for the use of the apartment and the use of the furniture - as is usually the case - the rent paid can be apportioned on an estimated basis according to § 162 AO. The use of the apartment is then deductible up to 1.000 Euro per month and the use of the furniture is deductible beyond that (BFH ruling of 4.4.2019, VI R 18/17).
(3) If the purchase costs for an individual item do not exceed 800 Euro (excluding VAT), they are immediately and fully deductible. This applies to purchases from 1.1.2018. Previously, the limit was 410 Euro. Higher costs must be spread over the expected useful life and are only deductible with the annual amount as "depreciation for wear and tear". The useful life for furniture is 13 years.
Currently, the tax authorities have announced a welcome simplification: If the purchase costs for the furnishings and equipment of the second home - excluding work equipment - do not exceed a total of 5.000 Euro including VAT, it is assumed for simplification purposes that these costs are considered "necessary" or not excessive and are recognised as business expenses without further examination (BMF letter of 25.11.2020, BStBl 2020 I p. 1228, para. 108).
