In order to be able to take your home office into account for tax purposes, it must first be clarified whether a separate study exists within your own four walls or whether you worked in your living quarters (e.g. at the dining table or on the sofa).
I. Separate study within your own four walls
Basic requirements
If you have your own study that forms the center of your self-employed activity, the related costs can be tax-reducing as business expenses. The following conditions must be met:
The study must be used almost exclusively for business/professional purposes and must be furnished accordingly. Private use (e.g. as a guest room or for hobbies) may not exceed 10%.
The study is spatially separated from the rest of the living space. A room is required, that is separated from the rest of the flat by a door or wall. A room divider, a study corner or a passage room are not sufficient.
There is enough space for the private living needs of you and your family.
Which costs are allowed to be deducted from taxes?
If these conditions are met, you can claim unlimited tax deductions for a proportion of the rent and additional property expenses, but also for the costs of electricity, water and heating as well as insurance.However, this is only possible on a proportionate basis for the area that the study makes up of the total area of the flat. This is calculated as follows:
Share of the study in % = area of the study / total living area of the flat x 100
Here is an example: You pay €800.00 rent per month for your house, including incidental rental costs. The total living space of your house is 100 sqm, the area of the home office is 10 sqm.
The share of the home office is then 10 sqm / 100 sqm x 100 = 10 %. Thus, the relative rent deduction is €800.00 x 10 % = €80.00.
This means that a proportionate amount of €80.00 per month can be claimed as a tax-reducing business expense.
In addition, the costs for functional equipment of the study can be claimed. This includes e.g. work equipment (PC, books, devices, office utensils, etc.) and office furniture, but not pure luxury items (gold-plated door handles). If the individual items/furniture cost more than €800 each, they may have to be depreciated over their useful life.
And what if there is another office workstation?
If you have another workplace outside your home to do your office work, for example a rented office or a desk in a co-working space, you cannot claim the costs for the home office as business expenses. Nevertheless, you can still claim the costs for work equipment (see above) for tax purposes.What if there is another workplace that is not an office?
If you exclusively carry out your office work in your home office, but the center of your self-employment takes place at another workplace (e.g. in a studio, a workshop or in the office of a customer), the expenses are limited to €1,250 per year and person. This is automatically the case if the exercise of your profession at the workplace outside your home outweighs the work at home.
If several persons (e.g. spouses) use a home office together, the maximum amount of 1,250 euros is to be applied to each person, so that each of them can claim their expenses for this up to this upper limit as a tax reduction.
II. Home office without own study ("working at the kitchen table")
For the years 2020 and 2021, you can exceptionally claim costs for your work from home for tax purposes even if you do not have a separate study. The reason for this exception is the increased working from home due to the circumstances of the Corona pandemic.
The actual costs incurred for working from home do not matter. Instead, you can claim a flat rate of 5 euros for each day in the “home office”. The flat rate can be deducted for a maximum of 120 days per year and is thus capped at 600 euros per year. However, you can claim the costs for work equipment and office furniture, just as if you had a home office.
For 2023, the home office lump sum will be de-funded and improved. You can claim six euros per day in the home office in your income tax return. Whereas the lump sum was previously limited to 600 euros per year, from 2023 up to 1,260 euros per year can be claimed. This means that 210 instead of 120 home office days will be eligible in the future.
The flat rate also applies if no home office is available.
III. How can Kontist help*?
As a client of Kontist Tax Service, we provide you with an online form to submit your information and work expenses to us from home. We will then ensure that this tax relief is taken into account in your tax return.
*We would like to point out that the services in the area of tax consultancy are provided by Kontist Steuerberatungsgesellschaft mbH. Kontist Service GmbH provides support in tax matters in accordance with §6 No.3, 4 StBerG. Kontist does not provide support on tax topics or tax consultancy services, but mediates these between you and Kontist Steuerberatungsgellschaft mbH and Kontist Service GmbH.