Updated regulations on the commuting allowance

The German Federal Ministry of Finance has updated its administrative instruction on the commuting allowance after an increased allowance applies from the 21st commuting kilometer from 2021.

The "Act on the Implementation of the Climate Protection Program 2030 in Tax Law" and the Annual Tax Act 2019 have resulted in changes to the distance allowances and the lump-sum taxation of certain employer benefits from 2021. The Federal Ministry of Finance has therefore updated its administrative instruction on the distance allowances and immediately adapted it to the case law of the Federal Fiscal Court that has since been issued.

In particular, this concerns the increase in the distance allowance from 2021. From 2021 to 2023, an increased distance allowance of 0.35 euros will apply from the 21st distance kilometer and 0.38 euros from 2024 to 2026. For distances of up to 20 km, a distance allowance of 0.30 euros is to be applied unchanged. In addition, the Ministry has stipulated that the increased lump-sum distance allowance from the 21st distance kilometer onwards is to be taken into account primarily for the partial distance traveled with a vehicle owned or leased for use, as the maximum amount of 4,500 euros does not apply to the latter. In contrast, the distance allowance of €0.30 for the first 20 km is primarily applied to the part of the journey made by public transport.

The ministry also accommodates commuters on another point. The Federal Fiscal Court had ruled that the commuting allowance also covers the costs of an accident on the way to work. The ministry disagrees and states that the accident costs that can be taken into account in addition to the flat-rate commuting allowance include both vehicle-related and route-related expenses as well as expenses in connection with the elimination or alleviation of bodily injuries that occurred as a result of an accident on a work-related trip between home and place of work.