Under § 3 No. 45 EStG, telecommunications devices in particular, but also other IT equipment, may be provided by the employer to the employee tax-free for private use. This also applies to corresponding accessories such as cases, cables or headphones, as well as data and call credits.
In a ruling published in 2023, the Bundesfinanzhof (BFH) decided a case in which employees had sold their expensive smartphones to their employer for an amount far below market value. The employer then provided the devices back to the employees tax-free for private use, bearing all costs for the telecommunications provider. The tax office refused to recognise the sale and treated the arrangement as taxable employment income. This is because the employer's assumption of costs for a mobile phone contract alone does not fall under the tax exemption; a device must also be provided. However, the BFH did not consider the below-value sale with subsequent provision to be problematic for the employer's assumption of costs. Accordingly, this constitutes a permissible tax structuring instrument.