The Federal Fiscal Court has ruled that the external office of a taxpayer can constitute a "permanent establishment" within the meaning of Section 4 para. 5 sentence 1 no. 6 EStG. A permanent establishment in this sense is the place at or from which a self-employed person provides their services to customers. This means that the costs of travel between home and business premises are only deductible to a limited extent in the amount of the commuting allowance. The decisive factor is that the taxpayer not only visits the fixed permanent business establishment occasionally, but with a certain degree of sustainability, i.e. continuously and repeatedly to carry out his professional activity.
Practical example:
The plaintiff was a self-employed intermediary. He determined his profit from business operations by preparing a balance sheet. He employed several employees who worked in his office. The plaintiff submitted his tax returns for this office (declarations on separate assessments of tax bases and on the trade tax assessment amount). The plaintiff did not keep a logbook for his vehicle, which was part of his business assets, so that private use was determined using the 1% rule. Following a tax audit, the tax office amended the assessment notices on the separate determination of tax bases and on the trade tax assessment amount. In particular, it reduced the operating expenses declared for the car by the expenses for journeys between home and business premises calculated at a flat rate of 0.03% of the list price. The tax office assumed that 220 journeys had been made. The plaintiff objected to this because his office did not meet the criteria of a "first place of work", as he mainly worked from home or directly at his clients' premises.
The BFH did not follow this argument. It clarified that the introduction of the new travel expenses law from 2014 had not changed the concept of a „permanent establishment“. The application of the flat-rate rule of 0.03% of the vehicle list price per month is therefore still justified. The BFH is thus sticking to its previous case law, according to which a permanent establishment is a fixed and repeatedly visited facility that constitutes an essential part of the professional activity.
Conclusion: If, as in the case of the plaintiff, there is no detailed logbook, the flat-rate regulations must be applied. This automatically leads to a limitation of the tax deduction of travel expenses. The BFH emphasizes that it is not sufficient to claim that an office is only used occasionally. Rather, proof of the sustainability of the usage behavior with the help of a logbook is required.