Per diem rates / daily expense allowances

I have a question in regards to per diem rates in Germany or by German companies. My company pas a travel per diem set by the standard by the finanzamt. 6 euro for hours over 8, 12 euros for hours over 14 and a full day at 24 euro. I am from the US and a daily allowance is used by companies so they don't have to account for every penny spent on business trips. Therefore you receive this amount whether or not you use it. If you eat at restaurants that are more expensive, your loss, cheaper places your gain.

Now for my questions,
if you don't eat during the day, does your company still allow you the per diem?

if you go over to a friends house and you eat for free, do you still receive the per diem?

if the client invites you out for dinner, do you still receive the per diem?

If there are any steuer links concerning this I would appreciate it.

You get a daily rate (rates may vary based on company and what is available-restaurants versus cafeterias). The only time that it matters where you eat is if you are eating on the expense account of someone else for business purposes.

I am just trying to find out if that is due to company policy or if it is written somewhere specifically. For instance, I know that in Germany that if you stay at a hotel that has a breakfast you must subtract 4.50 from the daily allowance or partial allowance.

Yes.


Yes.


Yes. If it is a completely unrelated firm.
If it is a sister company inviting you then you don't get that % of the per diem that realtes to that meal.

For lunch that is something like 40%, likewise for an evening meal.
Breakfast is 20%, so stay in hotels where breakfast is not included.

this is certainly true if you are within Germany and are invited to dinner on someone elses expenses. However, I am not sure how, if ever, the finance amt will ever put two and two together. They certainly can't ascertain whether you were entertained by a foreign company.

Well my situation is a bit mixed. I work for a company that is more a consultant oriented company. We are hired by outside companies. So if I am working for company A, doing consultancy for company B and while at a conference the manager from company B pays for my meal, then I can not claim back the per diem?

This took place in London and in Athens.

YES - you reduce weight & are Eur 24 (or whatever) richer.


YES


Put it this way - if you are invited out & someone from your company pays you have to reduce your daily rate by 40% of the full rate for each meal paid. So if you are travelling on business within Germany and your boss pays for dinner you have to take Eur 14.40 off your allowance. Your allowance cannot go negative so if you arrived during day and would have got 12 Euros and boss pays then your daily rate is ZERO for that day (not negative). Cheating here is dangerous as the boss (or whoever) has to state who is being entertained.
If client invites you out then its very unlikely that your company's finaciers will talk to the client's - but be careful if others from your company are present.

Information can be found in Steuertipps für Angestellte (not online but in many public libraries).

This topic is a minefield and there are 101 stories that could be used for an episode of a nightmare-comedy set in a Slough paper company...

Remember there are MUCH higher rates for trips outside of Germany which can make them (almost) financially lucrative
whereas trips wthin Germany are not prized in my experience because you can end up out of pocket.

IMHO you must deduct 4.60 from the daily hotel bill (slight difference) when staying in Germany; 20% elsewhere.


Show me somewhere where you can eat breakfast for 20% of the daily rate - at least in Germany


The rates for UK & Greece are different than for Germany (you quoted 24/12/6 Euros which is Germany rate).

I just checked our company's internal web:
UK: 42/28/14
London: 60/40/20 - for this you must be STAYING in London...
Athens: 36/24/12

This all assumes that you are working for a Germany-based company...

Well to be more specific, I wrote my companies EU human resources head about this issue, she was in the same mind that I was, that I did not need to subtract the dinner if paid by the client. However, if this was included in the cost of the hotel, then I would have to as this is being double expensed. She wasn't certain concerning the question though and forwarded it on to our company's global HR department and they also thought that I could consider it a lucky bonus, but they were not certain and then they forwarded the question back to our local HR, whose opinion I doubted. She then said that I would have to subtract 40% from lunch and 40% from dinner. I would like nly to know if there is a link, or I will call my Lohnsteuerhilfe person tomorrow, if I can't find something specific and then write what I find out.

our company deducts from the daily allowance a certain amount depending on whether we had one of the following:

1) Breakfast in the hotel (our company insists on booking hotels with breakfast included)
2) meals paid for by an internal department or company
3) any meal eaten in an internal works canteen
4) any meal paid for by a business partner or supplier.

However, I have never known anyone declare meals paid for by third parties when not in Germany.

HEM, I was thinking of foreign travel to stay in hotels where it is not included.
I don't do breakfast as such so getting a sandwich from a shop and a coffee at the meeting is cheaper than giving up 20% of a foreign per diem.

Brokenm, the HR people locally know the rules as they apply to employees in Germany and they are what is basicly listed above by me and other posters.

Monktstown, my HR person did not know that our company should deduct a set amount for breakfast from our per diem in Germany and not 20%, until another coworker complained a bit (for thirty cents). The problem know is that everyone in our company has different line managers and no one knows the "correct" rules and therefore processes their employee expenses differently. I would like to know the rules so that I can submit my expenses correctly.

ANd our company uses the standard per diem rates for Ausland trips as well, found here.

Ah right, I've always worked for companies where it is done centrally by people who know the rules, line managers don't.

Just put it in using the above and tell your boss: "I asked these blokes of Toytown so it must be all right"

I get the feeling that in Germany my company books hotels WITHOUT breakfast thus letting you fall into trap of having to pay utopian prices for breakfast in order to discourage people from travelling

My company also uses the standard 4.50 for the German brekkie. I found a link on wikipedia that summarises it,
"Übernachtungskosten
Als Übernachtungsaufwand sind die tatsächlich entstandenen Kosten (Hotel, Herberge, Fremdenzimmer, Appartement und Zweitwohnung) im Inland und auch im Ausland anzuerkennen. Nebenkosten zur Übernachtung ( Garage, Minibar, Fernseher, Telefon) sind keine Übernachtungskosten. Ebenfalls herauszurechnen ist ein Betrag für das Frühstück, wenn die Rechnung nur eine Summe für die Übernachtung mit Frühstück ausweist. Lässt sich der Rechnungsanteil für das Frühstück nicht feststellen, ist der Gesamtbetrag bei einer Übernachtung im Inland um 4,50 EUR und bei einer Übernachtung im Ausland um 20 % des für den betreffenden Staat geltenden Pauschbetrags für Verpflegungsmehraufwand zu kürzen.
Bei Übernachtungen im Inland können nur tatsächlich nachgewiesene Kosten als Betriebsausgaben oder Werbungskosten angesetzt werden. Die in diesem Zusammenhang oft genannte Pauschale (20,00 Euro) bezieht sich nur auf die weiter unten beschriebene Möglichkeit der steuerfreien Erstattung von Aufwendungen durch den Arbeitgeber.
Für Übernachtungen im Ausland dagegen können ohne Einzelnachweis die länderabhängigen, pauschalen Beträge für Übernachtungsaufwendungen als Betriebsausgaben oder Werbungskosten angesetzt werden..."

Yes HEM, there is something to that. German domestic business trips can be financially very unattractive.

Thereby hangs a tale...

One last question, when you use the foreign city specific prices, is there a set km limit from how far you are from the city? For instance, I was in Ascot and not in London for my meeting last week, that should be UK price and not London price, but I had one day in London and then dinner at Heathrow. Does the heathrow airport count as London?

Heathrow Airport is in the London Borough of Hillingdon and is deffo London for this purpose.
The M4 Corridor including Ascot is notorioulsy expensive, I'd say more expensive than London in some respects.
I used to work there a fair bit in the past and expenses will possibly be accepted at the London rate.

You need to understand the difference between company policy and German tax regulations. For example "6 euro for hours over 8, 12 euros for hours over 14 and a full day at 24 euro" is the German tax-free allowance. Your company can pay you what they like but anything they pay over these rates will become a taxable liability, borne by you or your company (their choice, dictated by their policy). Similarly if you have a breakfast (or any other meal) paid for by anyone (your company, a partner, a customer), then the per-diem allowances are reduced accordingly and the additional costs of the meal may become a taxable liability. One of the most obvious examples is if you entertain a client to dinner, have a slap-up feed and pay €150 for the feast. Assuming you ate and drank the same, that's €75 each (and by law, in Germany the restaurant must provide a detailed invoice). 30% of your per-diem is the tax free component, so 30% of €24 = €7.20 deducted from €75 gives a tax liability of €67.80 - you (or more usually in this case your employer) would have to pay income tax due on this sum. If you went out and paid €75 your self for a meal and your company were generous to reimburse it then the same applies. If someone else buys you a meal, then theory dictates you should declare this, deduct it from your per-diem and in theory declare any taxable advantage. If this happens in Germany then there may be a paper trail back to you (the generous donor should declare his "gift" to you), but in practice there is very little chasing. If it happens abroad there is almost no return trail, so you just got away with a tax-dodge

In most cases employers simply pay the tax-free allowances. That is easiest all round and doesn't get anyone into trouble or add additional work for the finance department or your tax bill. Note that these per-diem rates are not set to enable you to live (can anyone live on €24 a day?), but to cover the additional costs incurred over a normal existence at home. The premise remains that you would still have to buy food even if at home, but you probably would not eat out and therefore not spend as much.

That was the most clarifying explanation I've heard on the subject. Thanks YL6.

The per-diem rate is calculated according to different rules:

• For one-day trips, then the rate is calculated according to the highest rate place (country or city) or places you visit
• Otherwise for longer trips the daily rate is paid according to the location you find yourself at midnight.
• For a return trip from abroad the rate is paid according to the country/city you left to travel home
• For longer flights the applicable country for the rate is the country you finally land in (despite possible interim stops)
• If a flight takes more than two days then days in the air are counted at the Austrian(!) rate.
• For travel by ship, then whole days on ship are counted at the Luxembourg (!) rate. Departure and arrival days are calculated at the rate of disembarkation and embarkation harbour city

Thanks for the thanks. It does get more complicated however, but you probably don't need to know about this - your employer can only offset 80% of any entertainment costs against their business expenses but 100% of the 19% MwSt. Let's not go there...

For me your initial explanation was enough, we have a fixed set of rules for the per-diem calculations and you just put in some application when your trip started, when it ended and some other details about meals and hotels and it tells you what you should receive and it corresponds to what you explained. No need to make it more complex at the moment.

Thanks YSL. That answers everything except what the limit is for a city? When is London, London and when is Athens, Athens. Does it cout for suburbs? For instance would Lehel count as Munich or Garching as Munich (if Munich had a different rate for business travel, which I know it doesn't)

There is no written definition, but unless you abuse it (Leeds is not London, but practically all the Home Counties are) I can't imagine too many tax people reaching for their atlases to check...

For example Boston in the US has a higher daily rate (from German Finanzamt viewpoint) than most of US - but when I stay in Burlington (and you can see the towers of Boston from hotel) that does not count for the higher Boston rate...

Where the city is counted to is a matter of flexibility.
I have claimed London rates for the M4 corridor in the past.

As said by YL6, the rates and rules mentioned above are for the sums that are allowed tax free by the Finanzamt, the company can have other policies though most follow the tax rule.

Example, I used to work regularly in the UK and rather than take a hotel, I'd stay with a friend.
No hotel bill, but I could according to the law, claim 50 odd € as an overnight expense but less than a hotel would have cost.

Bought my mate a few drinks and everyone was happy.

EXCEPT, the other colleagues in Munich who caught wind of it and raised objections to HR that I was getting "speical treatment" as I have friends, aquaintances and family in the UK. They promptly abolished the policy of following the German tax rule on this issue so I then switched to staying in mediocre M4 Corridor hotels charging 150 quid I night that they then had to pay for.

Done exactly the same in the past MT, if there is no flexibility let the fuckers pay for what they think is right.

It's gets worse.

I've known cases of HR in certain companies deducting what they think is a normal commute to work off the time per day to force staff by minutes into a lower category.
I've heared it argued that sitting in a plane with a sarnie and a cup of tea of an evening means they can deduct your daily allowance by 40%
I've heared it argued that time spent travelling to a meeting shouldn't be counted towards the daily per diems.
I've heared of people being advised to take the LAST train to Munich Airport and wait there the hours till the first planes so firms can save the parking costs at the airport.

In order to save per diems and hotel costs many people get forced to do long trips where they get up in the middle of the night and get home after 20 hour days.
An ex colleague of mine fell asleep driving home on the A8 from Munich Airport.
She was simply so bloody tired after a 3AM start and landing back at Munich Airport at Midnight.

Did one last week, started at 5 am and arrived home after midnight, kinda the corporate norm these days.

I don't mind it per se but my boss can do the thing "oh I'm doing home office" the next day whereas I HAVE to clock in.

which last train? The S8 runs all night to the airport, except for a period about 2 hours when there are no planes. The S-bahn always run in time to catch the earliest planes. My company will not pay taxi costs to the airport, we have to take the S-bahn.

on a note of working time, if I catch a flight to Asia during the week, only 4 hours is counted as work time irrelevant of how long the flight is, and no time between 10pm and 6am is counted ever as it counts as sleeping time. The time before last, my return flight was cancelled and the whole trip took 36 hours. Only 4 hours was credited as working time.

I don't know about deduction of daily allowance but I know that they give me extra hours on my punch card which I accumulate for a gleittag.


Same as Owain's reply, Munich S-Bahn runs "through" the night.


I thot Germany has a rule no flights before 6 and no flight after midnight. And I checked Munich Airport's flight schedule. The only flight before 6 a.m. was a 5 a.m. flight to Corfu. Was she on holiday? Another thing, at such early flight, there ain't gonna be a loooong queue of people going thru security check. You don't have to ask the frequent travellers' expert, the such of CEOs but you can save time at the airport with online check-in for example.

i think the 3am start was referring to the time the person had to get up in the morning in order to catch an early flight. I live near the S8 line and I used to have to get up at 4:30am to catch my 7am commute to London.

agree with OG. I used to have to get a 0625-ish (before someone checks the timetable and corrects me !) flight to london and had to leave home by 415 to get to the airport in time by public transport. Makes for a long day if you are flying back that same day after long day of meetings.

Ahhhh, but that's if you live in Munich you can get up at 0330 or whatever and get the first S Bahn.
If you live outside of Munich the Airport isn't often reachable from "home" by train and S-Bahn to get the first flights out, the 0645 to Amsterdam etc.

That applies to about half my colleagues and as mentioned before HR, suggested they go into Munich on the last train from Oberschnaxxenhausen and sit at the airport rather than being allowed to drive there by car.