Germany to extend (and increase) tax rebate for people working from home

The Local
The Local - [email protected] • 1 Dec, 2022 Updated Thu 1 Dec 2022 16:48 CEST
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A man works on his laptop at home. Photo: picture alliance/dpa | Sina Schuldt

Starting in 2023, people working from home will be able to deduct €1,000 per year for working from home, up from the previous annual amount of €600. Here's what you need to know.

This means that in future, 200 instead of 120 days devoted to ‘home office’ will be eligible for the €5 per day deduction, which was originally introduced amid the Covid pandemic in 2020 and was set to expire at the end of this year.

READ ALSO: Germany plans tax rebate for people working from home

The sum can be deducted regardless if a separate workspace is used or available - meaning it applies to employees working on their couches or kitchen tables.

“This especially relieves families with smaller flats, who don’t have the space available for an extra office,” according to a statement on the German government’s website.

Employees who do have a separate study, though, can furthermore claim €1,250 back on their taxes.

However, certain criteria must be met - for example, the room must be used exclusively for professional purposes and must be separable from the rest of the apartment.

All workers in Germany also receive a lump sum of income-related expenses, which can be deducted each year: that amount is going up by €200 in 2022, bringing the total to €1,200.

The higher working-from-home allowance is part of the Annual Tax Act 2022, which was discussed by the Bundestag Finance Committee on Wednesday, and is set to be approved on Friday.

In September, about a quarter of employees in Germany were 'continuing to work from home' after Covid-measures were relaxed, according to the Munich-based Ifo Institute.

READ ALSO: Who benefits most under Germany's tax relief plans

More tax changes

The new tax law will also introduce an ‘excess profits tax’ (officially called the "EU energy crisis contribution") for companies that make large profits from oil, natural gas, coal and refineries. 

People with larger incomes will also be required to pay the tax on the gas price cap, which is set to be paid out to residents early next year. 

Vocabulary

Deduct - abziehen

Workspace - (der) Arbeitsbereich/ (der) Arbeitraum

Lump sum - (die) Pauschale

Income-related expenses - (die) Werbungskosten

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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