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Daily allowance expenses for assignments abroad

February 28, 2011 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller

Hello!

The following situation:

Last year, I worked as an employee for the organization "Doctors Without Borders" for 3.5 months (German employment contract), and was sent to a project in a developing country for the entire duration, which was regulated in a secondment contract. My salary was paid monthly into my German account, and I received a "field per diem" in local currency monthly while on site. The "field per diem" is significantly lower than the flat rate for additional meal expenses. I was accommodated for free in a house provided by the organization in the host country.

On the wage tax certificate, 30% of this "field per diem" was declared, partly as "Tax-free meal allowance" (No. 20) and partly as "Tax-free employer benefit for double household management" (No. 21).

My question(s):

1. Can I claim the flat rate for additional meal expenses for the 3.5 months abroad for tax purposes? After all, the reason was not a business trip or a work-related travel. My assignment to the developing country was essentially the reason for my employment.

2. The remaining 70% of the "field per diem" is not documented anywhere, as I have no receipts for it (the money was pooled from all participants and used to purchase food locally). Should I enter this amount under "Tax-free reimbursements have been paid that are not included in the wage tax certificate"? Is the fact that I have no receipts relevant?

I would greatly appreciate your response!
Best regards!

Dipl.BW/SB Ulrich Stiller

Dear inquirer,

Thank you for your inquiry, which I would like to answer based on your information and in the context of your situation in a preliminary consultation as follows:

If you, as I assume from your question, have a residence in Germany, you are subject to unlimited income tax liability in Germany due to the fact that your stay abroad was less than 183 days, provided that there is a double taxation agreement with the respective country. If there is no double taxation agreement with the country, the 183-day rule does not apply, and you would be subject to unlimited income tax liability in Germany even if your stay exceeds 183 days.

Due to your temporary assignment abroad, the conditions for a double household management are met. In this case, you apply the lump sums for foreign business trips analogous to the respective country and enter them in line 55 of page 2 of attachment N. In line 56 of attachment N, you enter the tax-free meal allowance (No. 20) from the wage tax certificate. The other tax-free employer benefits (No. 21) are likely related to accommodation, flight costs, etc. You do not need to offset these amounts as reimbursement, as you do not claim any expenses for them.

I hope that my explanations have been helpful in answering your not-so-easy question.

Best regards,

Ulrich Stiller
Tax advisor / Graduate Business Administrator