When can I deduct accident costs?
You can deduct the costs of an accident as business expenses if the damage occurred during a work-related journey. Work-related journeys include, for example:
- Journeys between home and workplace
- Business trips or off-site work
- Journeys as part of maintaining a second household
- Journeys during a work-related move
- Journeys during professional training
The question of fault is not relevant for the deductibility of accident damage. This also applies if you have to pay a fine as a result of the accident. However, the misconduct must be within the scope of the professional objective, and alcohol must not be involved.
In 2019, the Federal Fiscal Court ruled against taxpayers, stating that the commuting allowance covers all expenses. This means that accident costs are also covered, insofar as they are expenses incurred by the employee for "the journeys between home and first place of work", i.e., actual travel costs (BFH ruling of 19.12.2019, VI R 8/18). This means: Accident costs for commuting accidents are actually not deductible as business expenses. Actually, because there is a very interesting instruction from the tax authorities that those affected should definitely be aware of.
Currently, due to the negative BFH ruling, the Federal Ministry of Finance makes it unequivocally clear in a new decree that accident costs incurred on a journey between home and first place of work or on a family journey home in the case of a second household are still deductible in addition to the commuting allowance as extraordinary expenses within the framework of general business expenses according to § 9 para. 1 sentence 1 EStG. This means the above-mentioned negative BFH ruling is outdated! More precisely, it is not applied (BMF letter of 18.11.2021, IV C 5 -S 2351/20/10001 :002, para. 30).
