Double household management abroad
December 9, 2018 | 25,00 EUR | answered by Steuerberater Knut Christiansen
I will start a position at the Royal Mail in England in May 2019, where I will work 4 days a week and can work one day from home in Germany. My contract will be issued by a German subsidiary of Royal Mail. Since the 4 days per week exceed 183 days per year, the salary will be taxed proportionally in the UK and Germany. In England, I will rent an apartment.
Can I claim the apartment as a double household leadership for the portion of the salary taxed in Germany? Or will the tax office argue that the double household leadership is not necessary for the German portion of the salary that I earn from home?
Dear questioner,
Thank you for your inquiry. I would like to answer it as part of the initial consultation. Missing or incomplete information can affect the legal outcome.
In Germany, deductible expenses must always be related to income that is subject to German taxation. Since the income you mentioned is taxed in England, this requirement is not met. Germany only has the right to consider this income in the calculation of the tax rate (progression clause). Therefore, the income is considered tax-free according to German law. Deducting advertising costs is not possible according to § 3c EStG (1).
§ 3c EStG:
"(1) Expenses that are directly related to tax-free income may not be deducted as business expenses or advertising costs; paragraph 2 remains unaffected."
I cannot tell you whether such costs are recognized as advertising costs in England.
If you have any further questions, please ask.
Best regards,
Knut Christiansen
Tax advisor
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