German government to extend 'working from home' allowance
The German government has agreed to extend the 'home office' tax allowance this year.
Introduced in 2020, the working from home allowance or Homeoffice-Pauschale allows workers to deduct €5 in expenses for every day spent working from home, up to a maximum of €600 or 120 days.
The cabinet announced that the scheme, aimed at covering some of the extra costs of working from home during the pandemic, was being continued for 2022.
Employees can claim the money back when submitting their tax returns for the year.
What else has the cabinet agreed?
The cabinet has also initiated further tax relief for companies in order to cushion the economic consequences of the pandemic.
"This is a contribution to stabilising the economic recovery and helping to strengthen the economy," said Finance Minister Christian Lindner (FDP).
The bill put forward by Lindner also provides for the planned bonus for nursing staff and care workers to remain tax-free up to an amount of €3,000.
Companies will also have more options for offsetting Covid-related losses against profits from previous years.
Furthermore, improved tax relief options for machinery or equipment are aimed at providing investment incentives.
"I would like to do what is best for small and medium-sized businesses, crafts and industry as a whole," Lindner said, urging companies to invest their way out of the pandemic.
No date on 'super write-off' measure
However, a special tax relief regulation announced in the coalition agreement, which many companies have been waiting for, has not yet been announced.
The date for the introduction of the so-called 'super depreciation' or 'super write-off' is still unclear, Lindner said. He expressed doubts as to whether this measure could take effect at all in the current year. This tax break is intended as a kind of investment premium to encourage spending on climate protection and digital assets.
Taxpayers would be able to deduct a share of the costs of goods purchased or produced for climate protection and digitalisation from their taxable profits.
However, due to the current supply difficulties in many sectors, this assistance may not yet have the desired effect, Lindner said. "The federal government has not yet formed a final opinion on the so-called super write-off."
Longer deadline for tax consultants
Meanwhile, tax advisors will be given another three months to submit their clients' tax returns for 2020. The deadline has already been extended once already. It will now be extended to the end of May 2022.
The measures have been agreed by the cabinet, however, the decision still needs to be approved by the Bundestag and Bundesrat.
Tax relief measures/tax breaks - (die) Steuererleichterungen
Nursing or care staff - (die) Pflegekräfte
Tax return - (die) Steuererklärung
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