WHAT ARE ADVERTISING COSTS (Werbungskosten)?
Advertising costs (Werbungskosten) are all expenditures that are incurred in order for you to be able to do your job. For example, this includes the daily commute to work, business trips, training, expenses for work clothing or occupational insurance. The legislative assembly generally defines advertising costs as:
Advertising costs are expenses incurred when finding, securing and maintaining an income. (§ 9 EStG)
HOW MUCH IS THE ADVERTISING COST FLAT RATE (Werbungskostenpauschale)?
The tax office takes an employee flat rate (Arbeitnehmerpauschbetrag) of €1,000 for advertising costs per annum. Documentation as proof is not required for this flat rate (Pauschale) and the amount is automatically deducted from your gross income.
Many employees have much more occupational costs than €1,000 yearly. For those that would like to deduct as much of their advertising costs as possible per year, it is no problem at all to do it on your tax declaration. In this case, the tax office will require that you provide documentation as proof in the form of invoices or other receipts. However, the flat rate (Pauschale) can be used here for other expenses as well.
TYPICAL ADVERTISING COSTS (Werbungskosten) FOR EMPLOYEES
COMMUTING TO WORK
The route between your home and place of work can be deducted as a distance flat rate (Entfernungspauschale) of €0.30/km on-way from your taxes. The flat rate is not dependent on any means of transport and it can e.g. also be deducted by all people that carpool. A maximum of €4,500 can be deducted annually for the distance flat rate.
Alternative to the distance flat rate, employees can also deduct the total amount of their travel costs from their taxes. The tax office requires that you provide documentation in the form of fuel receipts or tickets for public transportation as proof.
BUSINESS TRIPS & TRAINING
Trips by train for external occupational activities or in-service training can be deducted from your taxes as well. Thanks to the business trip flat rate (Dienstreisepauschale), both one-way and return trips can be deducted for €0.30/km.
Note: If the employer has reimbursed you for specific costs from a business trip or training, this has to be included in the tax declaration.
FLAT RATE FOR ADDITIONAL MEAL ALLOWANCE (Verpflegungsmehraufwand)
Employees are entitled to remuneration for the additional meal allowance (Verpflegungsmehraufwand) during a longer absence. As long as the employer does not provide money for out-of-pocket expenses (Spesen) et al., the additional meal allowance flat rate is €12 for absences of more than 8 hours. A flat rate of €24 for absences of 24 hours. A much higher flat rate is available for business trips abroad.
WORKING MATERIALS (Arbeitsmittel)
Predominantly, materials/equipment used for business are recognised as advertising costs (Werbungskosten) and their full amount can be deducted from your taxes. As long as each work item does not exceed €487.90 (incl. 19% VAT), you can immediately deduct all of this. More expensive purchases can be divided up and deducted over several years (Abschreibung).
Only such costs can be deducted here that are not reimbursed by your employer. Basically, anything can be considered work materials/equipment.
Typical examples are:
- Work clothes
- PC, Notebook, Smartphone
- Occupational literature
Expenses for moving for occupational reasons can be completely deducted from your taxes. In addition to travel costs, other costs like the expenses incurred from using a removal company, realtor fees or, if applicable, double rent payments can be completely deducted. Additionally, there is a flat rate of €764 (as of 02/01/2017) for miscellaneous moving costs (Umzugspauschale) that can be deducted without any proof (invoices, receipts etc.).
DOUBLE HOUSEHOLD EXPENSES (Doppelte Haushaltsführung)
Those of you who run two households for occupational reasons can deduct a lot of expenses for the second household from your taxes. This includes:
- Rent and utilities
- Taxes on the second residence (Zweitwohnsitzsteuer)
- Broadcast license fee (Rundfunkbeitrag)
- Furniture and other fixtures
- Trips between the main residence and the second residence
REQUIREMENTS FOR A DOUBLE HOUSEHOLD
- The residence is furnished for occupational reasons.
- You can reach your place of work at least 30 minutes faster.
- A financial contribution to the main residence is provided.
- The main residence is your home (family and friends are there).
CONTRIBUTIONS TO OCCUPATION ASSOCIATIONS (Berufsverbände), UNIONS (Gewerkschaften) & CHARITIES (Spenden)
Contributions to occupation associations (Berufsverbände), unions (Gewerkschaften) or donations to charities (Spenden) can be deducted in full from your taxes.
OCCUPATIONAL INSURANCE (Berufsversicherungen)
All insurance that covers occupational risks can be deducted as advertising costs (Werbungskoten) from your taxes. This includes e.g. professional liability insurance (Berufshaftpflichtversicherung), accident insurance for injuries that are caused while working (Unfallversicherung) or legal insurance (Rechtsschutzversicherung). Insurance that covers private risks (Kranken- und Pflegeversicherung, Lebensversicherung, Haftpflicht, Rechtsschutz) are not considered advertising costs (Werbungskosten), but could be deducted as a miscellaneous expense (Sonderausgaben).
TELEPHONE AND INTERNET COSTS
If a private telephone or private internet access is used for your occupation, your can partially deduct this from your taxes. A flat rate of 20%, but a maximum of €20/month is accepted without itemising it.