In its decision (Ref. 2 BvL 13/09) of 6 July 2010, the Federal Constitutional Court overturned the restriction of the deductibility of workrooms by the Annual Tax Act 2007 in Section 4 V 1 No. 6b of the German Income Tax Act (EStG).
Since 2007, it has also no longer been possible to deduct a study if no other room was available for the professional or business activity. The judges upheld the complainant, a teacher, who only used his home study for two hours a day. Thus, the study does not have to be the centre of the professional or business activity, rather it is sufficient if the domestic study is only used professionally – even if only temporarily, i.e. for a few hours per month.
If no other workplace is available for the (temporary) activity, the costs can therefore be deducted from tax.
This does not only affect teachers without their own office at school and sales representatives who are mainly on the road. Self-employed persons who work predominantly on site at the customer’s can also deduct the costs for their only temporarily used study from their taxes.
Anyone who uses rooms in their own home for professional purposes other than as a study – e.g. as an archive, library, warehouse or workshop – can deduct these without restriction as business expenses, even if a study is available to them elsewhere. So, for tax purposes, it pays not to do mental work in your study – and then not to call it that.
by Dr. Johannes Fiala
by courtesy of
www.vdl.de (published in VDL Journal 05/2010, page 33)
and
www.network-karriere.de (published in Network-Karriere 10/2010, page 5 under the headline: Workroom retroactively tax-deductible since 2007).
and
www.handwerkermarkt.de (published on 23.08.2010 under the headline: Federal Constitutional Court: Workroom – Ruling)
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Dr. Johannes FialaPhD, MBA, MM
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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