Factory gate principle
The factory gate principle is a term from German tax law that the Federal Ministry of Finance introduced into income taxation as part of the 2006 tax reform . The principle is based on the assumption that, under tax law, work only begins behind the factory gate and the time and costs required to reach the factory gate are attributable to privacy.
This principle is particularly common in Anglo-Saxon law (USA, Canada, Great Britain and Ireland) and also in other European countries (Czech Republic, Greece).
Before January 1, 2007, the cost of traveling to work was tax-deductible as income- related expenses.
With the Tax Amendment Act 2007, this deductibility was basically abolished. In general, the journey to work was assigned to the private sector; Costs could only be deducted from taxes in hardship cases that were accepted as a lump sum from a distance of more than 20 km. Accident costs incurred on the way to work were also no longer considered income-related expenses. The principle applied not only to employees , but also to freelancers and tradespeople , who had to make additions to non-deductible business expenses .
This tax change, anchored in Section 9 (2) of the Income Tax Act (EStG), was declared unconstitutional by the decision of the Second Senate of the Federal Constitutional Court on December 9, 2008 and a retroactive change was required by the legislature. This means that the costs can be claimed retrospectively from January 2007 from the first kilometer onwards.
Origin of thought
The Federal Constitutional Court ruled on December 4, 2002 in a ruling on the unconstitutionality of the time limit on double housekeeping: "The basic deductibility of the costs of an operational or professional reasoned double housekeeping as operating expenses or business expenses is a traditional part of the basic decision of German income tax law, which is significant under tax law Do not let the professional sphere begin "at the factory gate". Mobility costs at the intersection of the professional sphere and private life are also recognized as income-related expenses or business expenses. According to this, travel expenses between home and workplace in particular belong - sufficiently logically - to the professional expenses deductible under the objective net principle, although such expenses are inevitably also privately caused due to the private choice of place of residence. "
The Federal Ministry of Finance concluded that “the Federal Constitutional Court regards the decision as to whether the professional sphere begins at the home or at the“ factory gate ”as a basic decision under simple law that - as before - must be made by the legislature. Since travel expenses are mixed expenses, the legislature must determine their tax deductibility within the scope of its structuring power. "
However, this view was already criticized by experts as a misunderstanding when the amendment to the law was passed. In the judgment mentioned, the Federal Constitutional Court also decided that: “In general: For the constitutionally required taxation based on financial capacity, it is not only a matter of the distinction between professional and private reasons for expenses, but in any case also of the distinction between free and any use of income on the one hand and inevitable, compulsory effort on the other. The consideration of privately induced expenses is not just a matter for the legislature. "
Individual evidence
- ↑ International comparison of the tax deduction of expenses for journeys between home and work or business premises (pdf)
- ↑ Decision of the Federal Constitutional Court: BVerfG, 2 BvR 400/98 of December 4, 2002, paragraph no. 57
- ↑ How does the BMF justify its view of the constitutionality of the new regulation? ( Page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.
- ↑ Legal opinion for the Hans Böckler Foundation by Prof. Dr. Joachim Wieland (pdf) (173 kB) ( Memento of the original from May 29, 2009 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Decision of the Federal Constitutional Court: BVerfG, 2 BvR 400/98 of December 4, 2002, paragraph no. 55, 66
