Background:
Until now, the BFH had always assumed a property-based deduction of expenses for a home office. This meant that in cases where several taxpayers (e.g. spouses) jointly used a home office, only a total of €1,250 could be deducted as the maximum amount.
Update:
In two rulings dated 15 December 2016, VI R 53/12 and VI R 86/13, the BFH has now decided that the maximum amount must be applied on a per-person basis. This means that where a home office is used by several taxpayers, the maximum amount of €1,250 can be claimed per taxpayer. The BFH has thereby changed its case law on § 4 (5) sentence 1 no. 6b sentence 2 EStG in favour of taxpayers.
In one case, the claimants, a married couple, jointly used a home office in a single-family house that they owned in equal shares. The tax office and the fiscal court recognised the annual home office expenses of approximately €2,800 only up to a total of €1,250, allowing each spouse only half of that amount, namely €625.
The BFH ruled to the contrary, holding that the maximum amount of €1,250 must in principle be granted to each of the two spouses, and clarified that, in the case of spouses, the costs are in principle to be allocated equally to each spouse where they jointly use a home office in property co-owned in equal shares. In the case at hand, however, the fiscal court had not examined whether the claimant had her own workspace in the home office to the extent specifically required for her professional activity. The BFH therefore referred the matter back to the fiscal court.
In the other case, the BFH also emphasised that, for the deduction of expenses for a home office, it must be established that a professional or business activity is actually carried out there. The scope of this activity must also make it plausible that the taxpayer maintains a home office for this purpose. The fiscal court had not clarified this either. The BFH therefore had to set aside the lower court's decision in this proceeding as well and refer the matter back to the fiscal court.
Source: BFH, published on: 22 February 2017
Frequently asked questions
Frequently asked questions
Is the EUR 1,250 cap for a home office granted per person or per property?
Under the BFH rulings of 15 December 2016 (VI R 53/12 and VI R 86/13), the cap of EUR 1,250 is applied on a per-person basis. If several taxpayers (e.g. spouses) share a home office, each may claim the full cap. With this, the BFH revised its previous property-based case law in favor of taxpayers.
How are the costs of a jointly used home office allocated between spouses?
In the case of equal co-ownership, the expenses for a jointly used home office are generally attributed to each spouse in equal shares. Each spouse may deduct their share up to the maximum amount of EUR 1,250, provided that the personal deduction requirements are met in their case.
What conditions must each taxpayer meet to claim the deduction?
Each user must have their own workspace within the home office, to the extent actually required for their professional or business activity. In addition, it must be established that a professional or business activity is in fact carried out there, and the scope of this activity must make maintaining a home office plausible.
Which legal basis governs the deduction of a home office?
The relevant provision is § 4 Abs. 5 Satz 1 Nr. 6b Satz 2 EStG. Under this rule, expenses for a home office are deductible up to €1,250 per year if no other workplace is available for the business or professional activity. The BFH now interprets the provision on a person-related basis.
What does the revised BFH case law mean in practice for married couples working from home?
Married couples who share a home office can now deduct up to €2,500 per year instead of the previous combined limit of €1,250. The condition is that each spouse individually meets the deduction requirements, meaning each must have their own workspace in the room and actually work there to a corresponding extent.