Claiming back home-office expenses on tax return

54 posts in this topic

Posted

Hi there. I'm a registered freelancer. I've set up a home-office in my apartment (separate room with own doors) and wanted to know if anyone has a good guide on how I go about offsetting the costs (Miete, Hausverwaltung, Net/Phone, Strom yada yada) against tax. Is there a standard schedule of percentages or do you simply chance your arm?

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Posted

Assuming you use this "home office" exclusively and demonstrably in the course of your business then you can usually offset any costs accrued on your annual tax return. Where these costs are part of a larger charge (e.g. rent, heating, power, water, rubbish collection, insurance, ground tax, cleaning. etc) then it's quite simply the %age of floorspace, so if you have 150m² of apartment and an office room of 30m² then 20% of all total costs can be offset. Furniture and fittings such as PC, printer, scanner for the office can also offset so long as they are used exclusively for your work, but depending on value may need to be linearly depreciated over 3 or 4 years. You can also offset renovation and decoration costs (but not too often!). The "home office" must not be used for any other function, so you can't have a bed in it for example (otherwise it would be a bedroom too!). When you first declare this on your tax return you may be asked to submit plans of the apartment to show layout and size, along with photos of the room.

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Posted

As YL6 said.

If you can read German its well covered in Steuertips für Angestellte which may also be available in your local library for consultation.

There is possibly also a Steuertips für Selbstständiger.

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Posted

I attempted to claim back home office expenses. I even sent off photos and a floor plan of my apartment to prove that I have a separate room with just a desk, chair, and office shelves. They didn't believe me though and instead issued an appointment to come and inspect the following week.

Although, strictly speaking, I could have rearranged my furniture in order to comply, I didn't fancy having tax inspectors snooping round my place. The shape of my apartment is such that nobody in their right mind would furnish it with a dedicated office. I could have done it, legally, but it'd look unnatural, my pad just doesn't lend itself to that configuration.

So instead I quickly cancelled my claim and they aborted the visit.

Summary: If you're thinking of sneakily rearranging furniture to claim home office, make sure you're OK with inspectors visiting you in person.

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Posted

The first year I worked a "home office" I tried to claim my office room, they came and though it was separate and had a door and only office stuff in it, and a dining table was in my midsized room and a bed in the small room, they didn't accept it because it wasn't "believable" since it was the largest room in the place.

A couple years later I claimed the smallest room, and they didn't blink. I've also switched rooms I've claimed in the mean time - based on the one I was actually using as an office - so far they haven't been back. I think it's like the Kreisverwaltungsreferat - it depends a bit on the beamter.

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Posted

They didn't believe me though and instead issued an appointment to come and inspect the following week.

In my case they came unannounced, back in the 1990s.

Found me working on my then brand-new Win95 Siemens desktop PC :)

On their visit (they sent them out in pairs) they even turned over the Persian carpet in the office.

No idea why, I hadn't claimed for it, Vermögensteuer had been abolished, so probably just pure curiosity.

Fortunately it still had the price written on that sticker describing the type, size and country of origin, and judging from their expressions they were quite disappointed by how cheap it had been ;)

However, they only wanted to see the office, so no snooping around elsewhere.

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Posted

I did some googling around on German forums last week.

Apparently the inspectors do things like look for furniture marks left in the floor, as well as shadows left on walls.

If something hints at furniture having been re-arranged just prior to their visit, then that'll raise their suspicions.

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Posted

Ahhh, revelation after nearly 20 years!

Thank you :)

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Posted

My Arbeitszimmer has been accepted for a number of years - I have 100% Work-From-Home & showed the addendum to my Arbeitsvertrag to support this. They probably don't make too much fuss since the Arbeitszimmer represents only about 6% of the total house area & the number of other rooms ayre appropriate to the number of persons in the household.

If they did come unannounced I'd have to send them away until I was able to make sure that there was no company-confidential information lying around - currently there is plenty of this on my desk.

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Posted

I've claimed on office space for years, even when I was in England. Nobody ever came or threatened to come. The first couple of years I did have a dedicated room, but in England it ws in my bedroom, so god they didn't check! I don't know what my accountant will do this year, now that I'm back in Germany. The flat is so small I can had,y claim.

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Posted

How does this work for regular employees that have an office to go to but often work from home? At my office we have a "hot desk" setup and if everyone comes to the office we will not have enough places so we are encouraged to work from home. It does not however say anything about working from home in my contract so I am not sure if I can claim anything or not.

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Posted

AFAIR - the majority of your work must be performed in the home office and you cannot have a desk at work.

The hot desk arrangement might fall under this, but unless you work 80% or more from home - and it's stipulated in writing - then it probably won't fly (though I'm not a tax beamter and things may have changed)

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Posted

As DDBug said, you cannot have a desk at work. In 2009, I had to provide confirmation from my employer that they made available no work space for me to use, such that my home office was required (and not just convenient) for the completion of said work. Might have changed since then, of course...

HTH

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Posted

The Hausmeisterin is a Leihoma/Tagesmutter who looks after several small children who come to our apartment building during the day. From her I got the idea of running a business from home. If I use my flat as office space or for consulting, would I be able claim part of the rent as an expense for my taxes?

[adminmerge][/adminmerge]

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Posted

Yes, as long as the office is a separate room and you don't have to cross the office to get to another room in your apartment.

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Posted

ok, I guess my question should have been how do I go about registering space as work area.

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Posted

You don't have to register anything. You simply claim it as a proportion of your rent/utilities on your next tax return. If your flat is 100 sqm and your office is 20 sqm, you can claim 20% of your rent and utilities as a business expense.

But as PandaMunich noted, it must be a separate room (with doors that can close) and can't be a Durchgangszimmer.

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Posted

Interesting!

Questions: My US husband would for example start a business just offering services, and he would use a separate small apartment next to us that is not in our apartment, can he write that off with his taxes? Also, could he do that since he doesn't have any income in Germany, he only files his income annually with the US?

The small apartment would not be rented separately, it would be added to our lease since we would pay more rent, but it wouldn't actually rent like a separate apartment. Does that make sense? :lol:

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Posted

You don't have to register anything. You simply claim it as a proportion of your rent/utilities on your next tax return. If your flat is 100 sqm and your office is 20 sqm, you can claim 20% of your rent and utilities as a business expense.

But as PandaMunich noted, it must be a separate room (with doors that can close) and can't be a Durchgangszimmer[/].

Yes! That includes pro rata heating, electricity bills, water costs, even light bulbs!

The cat´s toilet is in the office part of the apartment...Panda: tax deductible? :)

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Posted

...he only files his income annually with the US?

If he has income while being resident in Germany, then he has to file a German tax return and tax it here.

The fact that he is a US citizen and that the US have this (strange) rule of obliging their citizens to file even if they don't live there doesn't change this.

My US husband would for example start a business just offering services, and he would use a separate small apartment next to us that is not in our apartment, can he write that off with his taxes?

The small apartment would not be rented separately, it would be added to our lease since we would pay more rent, but it wouldn't actually rent like a separate apartment.

Yes, he can claim for the small apartment in his German tax return as a business expense.

Example:

  • Surface of small apartment: 30m²
    Combined surface of both apartments: 100m²
    --> he can claim for 30/100 = 30% of the combined rent and utility costs (= Nebenkosten).

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Posted

The cat´s toilet is in the office part of the apartment...Panda: tax deductible?

Not unless you can claim for the cat as a necessary part of your business.

Open a cat café and you can claim for it :)

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Posted

Of course, my cat is a necessary part of the business, Panda! The website clearly states " Gunn & Partner "!! :D

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Posted

Thank you Panda!

My husband has no income coming from an employer in Germany, only the money he receives in the US. Since he has no income here in Germany and therefore doesn't have to file taxes, how would he deduct office space etc.? I guess when he starts out he would have to file the few Euros he made and then deduct the office space? :lol:

Better yet, how would you do a German tax return if for example you offer services, but you are getting paid in dollars?

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Posted

As a resident of Germany, your husband is required to tax his worldwide income in Germany, by filing an annual tax return. The source of the income is irrelevant for tax purposes.

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Posted

Better yet, how would you do a German tax return if for example you offer services, but you are getting paid in dollars?

You use the exchange rates set down in the official Umsatzsteuer-Umrechnungskurse to calculate how much it is €.

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