What do I need to consider regarding the tax treatment of stays abroad?
February 7, 2022 | 50,00 EUR | answered by Robert Lehmann
Dear tax lawyer,
My name is Clara Otten and I have been working for an international company for several years, which regularly requires business trips abroad. In the past, I have always properly reported these stays abroad in my tax return, but I am not sure if I have done everything correctly.
My main question is: What do I need to consider in the tax treatment of stays abroad?
I am concerned that I may not be optimizing tax benefits or even making mistakes that could lead to unintended consequences.
Background: My stays abroad usually last between 1-2 weeks and during this time I engage in both professional and private activities. I receive a travel allowance from my employer to cover my expenses during the stay abroad.
I understand that the tax treatment of stays abroad can be complex, especially when it comes to distinguishing between professional and private activities. Therefore, it would be helpful if you could provide me with specific advice on how to correctly handle my stays abroad for tax purposes.
I would greatly appreciate your support and thank you in advance for your help.
Sincerely,
Clara Otten
Dear Mrs. Otten,
Thank you for your inquiry regarding the tax treatment of stays abroad. As a lawyer specializing in tax law, I can provide you with some recommendations on how to correctly report your stays abroad in your tax return and make the most of possible tax benefits.
First of all, it is important to know that the tax treatment of stays abroad usually depends on whether they are work-related or private trips. For work-related stays abroad, you can usually deduct certain costs for tax purposes, such as travel expenses, meal allowances, accommodation costs, or costs for job-related training.
In your case, since you receive a flat-rate allowance for travel expenses from your employer, you should report this allowance in your tax return as taxable income. At the same time, you can also deduct the actual costs incurred for your stays abroad as business expenses, if they are not already covered by the travel expense allowance.
It is important that you keep all receipts and evidence for your stays abroad carefully to be able to prove in case of an audit by the tax office that these are indeed work-related trips. Also, make sure to clearly document the allocation between business and private activities during your stays abroad.
Furthermore, you should also be aware that there are specific tax regulations for stays abroad in some countries, such as regarding the taxation of meal allowances or the recognition of certain costs. Therefore, it might be advisable to inform yourself in advance about the tax peculiarities of the respective country.
In summary, I recommend you to carefully document all expenses and income related to your stays abroad, separate business and private activities clearly, and comply with the tax regulations of the respective country. If you are unsure whether you have done everything correctly, it might also be helpful to seek advice from a tax advisor or a specialist lawyer in tax law.
I hope that my tips are helpful to you and I am at your disposal if you have any further questions. Thank you for your trust and I wish you success with your tax return.
Best regards,
Robert Lehmann
Lawyer specializing in tax law
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