GRP Rainer LLP

Posting Workers Abroad Is Likely to Make Maintaining a Residence in the Home Country Difficult

Posting a worker for years to a subsidiary company abroad can spell changes to the arrangement of his professional expenses.


Cologne, NRW -- (SBWIRE) -- 02/24/2013 -- GRP Rainer Lawyers and Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Stuttgart, Bremen, Nuremberg and London explain: Right now in corporate groups and firms that operate across Europe or even worldwide, it is highly likely that a worker will be active at a subsidiary company abroad during the course of his career. When this happens, primary residence in the home country is frequently retained.

Such was the case that the Düsseldorf Finance Court had to decide in its judgment of 14 January 2013 (Az.: 11 K 3180 / 11 E). Here, the claimant was initially posted in total for six years to a foreign subsidiary company of a German parent group. Subsequently, he and his entire family moved abroad, yet he retained his German residence. He wanted to claim the rental expenditure pertaining to the foreign residence and the journeys between there and the foreign workplace as professional expenses.

The Düsseldorf Finance Court rejected this complaint in the aforementioned judgment. In the judges’ view, the point of reference for this decision was the duration of the worker’s post abroad. In the present case, this stretched over a total of six years, during which the foreign workplace is not to be seen as temporary but rather a regular workplace.

According to the reasoning of the judgment, the centre of the claimant’s life was his work abroad, thus the maintenance of a residence in Germany could not be considered from the perspective of maintaining a second household. The Court therefore considered that the rental expenditure for the German residence was not deductible.

For the same reasons, the Düsseldorf Finance Court also did not share the claimant’s opinion with respect to the claimed travel expenditure and granted him merely the enforcement of the established commuter’s allowance. The actual costs were not taken into account.

If you too are soon to face a work-related post abroad, you should give serious thought as to whether continued maintenance of your residence in Germany is economical for you. A lawyer active in tax law can advise you on this matter.

About GRP Rainer LLP
GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Essen, Frankfurt, Hamburg, Hannover, Munich, Stuttgart, Bremen, Nuremberg and London UK.

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