How business expenses are handled in Germany

17 posts in this topic

Posted

So it looks like I will possibly be starting a new job soon, involving a fair bit of travel and such.

I am just wondering how such expenses are generally handled here? In Canada, we would either be issued a company credit card, or given a fixed "allowance" per diam. And occasionally pay for the expenses out of pocket and then submit them later.

Now, I am sure there are a variety of ways this is done here, but since credit cards are far less popular here I thought I would ask.

I know the best way to get the answer would be to ask the company, and I will, but can't do that till after the holidays... so I thought I would toss it out there to you good folks and see!

Thanks

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Posted

You need to talk to the company you are joining.

There are some pretty strict tax laws about expenses.

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Posted

They could tell you that they follow the general rules and give you an allowance for time being from home. This allowance is calculated as follows:

8 - 14 hours away from home: 6 euros

14 - 24 hours away from home: 12 euros

24+ hours away from home: 24 euros

When you are in a hotel with breakfast which your company pays for, there is a 4,50 reduction to these amounts.

This allowance is called the Verpflegungsmehrpauschale, basically you would get a bit of pocket money for the extra money you spent for being away from home.

I am away from home for work a lot as well, from my experience this extra allowance is way not enough to cover the actual expenses. So make sure that you get an agreement that you get at least reimbursed for the extra costs that you have to make for not being at home.

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Posted

The problem with it is that it's really no where enough if travel outside of Germany a lot. I will blow the 24 euros on one meal when I travel to Scotland but the company I work for understands this and deals with it. You really really have to understand how the company you work for deals with it.

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Posted

Wow, I am glad I asked! Thanks for the information, I will definitely have to talk to the company, because 24yoyo's for a day is definitely not gonna do it!

Thanks

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Posted

because 24yoyo's for a day is definitely not gonna do it!

That's what I am trying to tell my boss too...

The problem with it is that it's really no where enough if travel outside of Germany a lot.

For other countries than Germany there are different rates. For example when I go to Holland for a few days, it is 39 euros for a full day instead of 24. There is a whole table of different rates for each country. Still you're right, it does not cover what your expenses really are.

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Posted

They could tell you that they follow the general rules and give you an allowance for time being from home. This allowance is calculated as follows:

8 - 14 hours away from home: 6 euros

14 - 24 hours away from home: 12 euros

24+ hours away from home: 24 euros

When you are in a hotel with breakfast which your company pays for, there is a 4,50 reduction to these amounts.

Thats German-internal travel. These are the maximum tax-free allowances payable as laid down by the Finanzamt (or related).

Your company could pay more but that extra would be taxable. Most companies pay exactly these values. See http://de.wikipedia.org/wiki/Verpflegungsmehraufwand

You are also expected to deduct 40% of the 24-hour allowance ifor each main (midday/evening) meal that is paid for eg your manager invites you out during a trip.

Still you're right, it does not cover what your expenses really are.

Thats not the intention. The intention is is covers the addition on top of what you would normally spend. It is of course a guestimate.

For instance the USA rates are 12/24/36 Euros for the intervals as above. In the Wikipedia page I linked above there is a link to a PDF file

with the the current allowances per-country...

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Posted

In my experience you can make a profit on non-German biz trips.

You will likely make a loss on Germany biz trips which is why they are avoided like the plague.

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Posted

Both the above are true. Also given that within Germany many hotels booked by companies for their employees exclude breakfast & have utopian prices for breakfast your daily allowance is almost gone before you start. Within US, UK if you go carefully you can at least break even. Not possible in Germany at these rates.

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Posted

The Joke is that the German governemt treat being away from your family as some sort of benefit. On second thoughts maybe they are on to something there...

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Posted

Your company can either pay your the fixed daily rates (different per country and sometimes per city) or refund your costs against receipts. It's their choice. However, anything they pay against receipts over and above the daily allowance becomes a taxable benefit which someone has to pay. If your company is generous maybe they will pay it, otherwise you will be liable for additional tax on this supplementary income at your highest rate. This is administratively quite complex, so few companies are prepared to do it. The allowances are not intended to cover your costs, but are a contribution to the additional costs you incur whilst being away from home. Unless you pig out at swanky restaurants all the time, the allowances are usually more than enough for most people. Agreed, some hotels charge excessively for breakfast, but you can either make sure this is hidden on the hotel bill, or simply take the €4.50 hit from the allowance to cover it. If while traveling abroad you stay overnight in a cheaper hotel, or with friends you can also claim an additional standard allowance for the stopover (assumes no hotel bill). In London this would be €152 for example, and in New York or LA €150

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Posted

Official list of German Ministry of Finance for all countries (for countries not in the list, take rates for Luxembourg) with allowed expenses (do not have to be backed up by hotel and restaurant bills):

http://www.bundesfinanzministerium.de/lang...icationFile.pdf

Verpflegungsmehraufwendungen = for food

sperated for absences of at least 24 hours, between 14 and 24 hours, and between 8 and 14 hours

Übernachtungskosten = for spending the night

These are the amounts companies can actually deduct from their income under German tax law for the trips you as their employee take. However, whether they are willing to pass on exactly these same amounts to you is another question.

For trips within Germany you get the measly lump sums of 24€, 12€ and 6€ for trips of at least 24 hours, between 14 and 24 hours, and between 8 and 14 hours for food. For the night you have to turn in the German hotel bill and will get exactly how much it cost, you cannot just spend the night at a friend's and then get a lump sum compensation as you could on a trip outside Germany. These are also the amounts your company can claim under German tax law, so anything on top of that cannot be deducted from their income and will take some negotiating skill on your side.

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Posted

Wow again, and thanks again everyone! I will see how the company handles it!

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Posted

Anybody know the max payback period for when your employer allows direct expenses (submitting of receipts and payback against them)?

I submitted a report back in November and am still waiting on the check. Can I reference any particular law to get the accountant off his butt?

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Posted

There is no legal time limit for the payment of expenses, although it may be defined in your employment contract. The general guide is "in a reasonable time", but it could also depend on how much you are claiming (the more you claim the quicker it would be fair to pay, as in effect it is your own money that is being refunded). Three months wait is on the border of being unreasonable. In essence your employer owes you money and has not paid it in a reasonable time. Assuming your claim was in writing and was correctly completed and submitted then you can treat it like an unpaid bill and send them a formal letter, requesting payment in a specified time (10-14 days would seem reasonable, maybe less if it is a large sum). If they have not paid by that time you can essentially take them to Court which is quite straightforward. Not sure if you want to do this with your employer of course, but legally that's the way to proceed.

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Posted

Thank you for the information, it's something to think about if this drags out any longer.

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