In its judgment of 25 February 2015 (Az. 2 K 1595/13), the Finanzgericht Rheinland-Pfalz (Tax Court of Rhineland-Palatinate, FG) ruled that a taxpayer – even if he maintains two residences for professional reasons – cannot claim two home offices for tax purposes. Due to the fundamental importance of the matter, an appeal to the BFH was admitted. The plaintiffs are married and maintain one residence in Rhineland-Palatinate and another in Thuringia. The plaintiff is both self-employed (offering seminars and training courses for Steuerberater (German Certified Tax Advisors)) and – in Thuringia – employed. In his income tax return for the tax year 2009, the plaintiff claimed expenses for two home offices (totalling EUR 2,575) as business expenses, arguing that he required a home office in each of the two residences for his self-employed activity. The defendant tax office recognised only one home office and only expenses in the amount of EUR 1,250. The plaintiffs' objection and court proceedings were unsuccessful. In its (not yet final) judgment of 25 February 2015 (Az. 2 K 1595/13), the FG Rheinland-Pfalz agreed with the position of the defendant tax office. The FG essentially provided the following reasoning: Under the EStG, expenses for a home office are deductible only under certain conditions and, even then, mostly only up to the maximum amount of EUR 1,250. Only in exceptional cases, where the home office forms the centre of the entire business and professional activity, may the costs be deducted without limitation. The latter does not apply to the plaintiff, since he carries out his lecturing activities (seminars, training courses, etc.) outside his home office. He may therefore deduct the expenses only up to the maximum amount of EUR 1,250. This maximum amount is (also according to opinions in the legal literature) person- and object-related. It can therefore only be granted once per year (and not twice or more). It does occur that taxpayers use different home offices within an assessment period, either successively or simultaneously, for example due to a move or where someone – like the plaintiffs – maintains two residences at the same time. However, a taxpayer can never use two home offices simultaneously. Therefore, even in such cases, the maximum amount (EUR 1,250) can be granted only once and not multiple times. The legislator has lifted the deduction limit only for the case where the home office forms the centre of the entire business and professional activity. Other situations (relocation, dual household management, etc.) were not intended by the legislator to allow the deduction limit (EUR 1,250) to be exceeded or used multiple times. The fact that the maximum amount is person- and object-related can, incidentally, also work in favour of the taxpayer. The BFH has, for example, ruled that a taxpayer who maintains a home office only for certain months (i.e. not throughout the year) is entitled to the full (unreduced) maximum amount. The FG admitted the appeal because it has not yet been clarified by the highest court whether a taxpayer who uses a home office in each of his two households may deduct the maximum amount (EUR 1,250) once or twice.
Frequently asked questions
Frequently asked questions
Can two home offices be claimed for tax purposes?
No. According to the ruling of the FG Rheinland-Pfalz dated 25 February 2015 (Az. 2 K 1595/13), a taxpayer cannot deduct two home offices even if maintaining two residences for professional reasons. The maximum amount of 1,250 euros is person- and object-related and is granted only once per year. Simultaneous use of two home offices is effectively impossible.
When are expenses for a home office fully deductible?
Expenses for a home office are only fully deductible if the home office constitutes the centre of all business and professional activity. If the main activity takes place outside the home office – for example, in the case of seminars or lectures – the deduction is capped at EUR 1,250 per year.
How does the object-related nature of the home office deduction cap affect taxpayers?
Object-relatedness means that the maximum amount of EUR 1,250 per taxpayer per year is granted only once, regardless of whether several home offices are used. However, it can also work in the taxpayer's favor: according to the BFH, the full, unreduced maximum amount applies even if the home office is used for only a few months of the year.
Does the EUR 1,250 cap also apply in the case of relocation or a second household for work?
Yes, the cap is granted only once per year, even in cases of relocation or a second household for work (doppelte Haushaltsführung). The legislator lifted the deduction limit solely where the home office constitutes the centre of the entire professional activity. Other constellations neither increase the deductible amount nor allow it to be claimed multiple times.
Is the ruling on two home offices final?
No, the ruling of the Finanzgericht Rheinland-Pfalz dated 25.02.2015 (Az. 2 K 1595/13) is not final. Due to its fundamental significance, an appeal to the Bundesfinanzhof was admitted, as it has not yet been clarified at the highest judicial level whether the maximum amount may be deducted once or twice when two home offices in two households are used.