Law & Numbers - News Tax

Limitation of Commuting Expenses

23.01.2008 (Germany)

Constitutional Court is requested by Federal Tax court to decide on expense limitation

Starting 2007, commuting expenses are only accepted for a distance between home and work exceeding 20 km.

Today, the Federal Tax Court published a decision dated January 10, 2008 (VI R 17/07). It decided, that the limitation of commuting expenses starting 2007 might not be line with the constitution. Since the Constitional Court is in charge of such questions the Federal Tax Court now requested the Constitional Court to finally decide on subject matter.

Taxpayers may apply for a preliminary full deduction of commuting exepenses. However, the issue is not finally settled and taxpayers that go for a full deduction might have to repay their tax savings in case that the Constitional Court does not follow the Federal Tax Court.

In all cases, we recommend to keep the income tax assessments 2007 onwards open until a final decision.

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