In a most recently published judgment, the Supreme Tax Court held that a self-employed person is considered to maintain two households only if he or she maintains a separate household outside the location where he or she primarily carries out his or her business activities and also resides at the location where he or she primarily carries out those activities. In any case, the primary focus of the entire business activity of a self-employed person is at the place where he or she pursues the sole business (permanent establishment) in the context of Section 4 (5) Sentence 1 No. 6 Income Tax Act.
The Baden-Württemberg Tax Court decided that maintaining a double household cannot be justified in the absence of a permanent residence at the out-of-town work location if the employee lives in a motorhome there during the week but regularly returns to his family home on weekends using the motorhome for transport.
In a recently published decision, the Supreme Tax Court held that an employee, in addition to the deduction of expenses for the rented apartment as double-household relief, can also claim the costs for a parking space as income-related expenses.
In the case of double household abroad, it must be decided through an overall assessment of the objective circumstances of the individual case whether and to what extent accommodation costs are necessary. However, the Supreme Tax Court held in the case of an official residence assigned under civil service law that the actual amount of accommodation costs at the foreign place of employment are always deductible as income-related double household expenses.
Expenses for an apartment are only deductible as double-household expenses incurred in advance if the taxpayer has made a conclusive decision to use the apartment in the future as part of a double-household deductible for tax purposes. Whether this is the case must be decided through an overall assessment of the objective circumstances of the individual case.
The Supreme Tax Court has held that an employee moving to take up a new job may deduct the additional rental cost incurred in maintaining two homes for a temporary period as a business expense.
