VAT Rates, Daily and Mileage Allowances and E-archiving in Germany

In Germany, employers must pay per diem allowances to employees to cover meals during business travel.

Domestic and foreign daily allowances

For a one-day trip the following rates apply:  

For a multi-day trip the following rates apply:

In transit - airplane

Where employees embark on a long flight, they should receive the daily rate applicable for Austria.

In transit - boat

For days travelled without embarkation or disembarkation, the daily allowances applicable in Luxembourg are to be applied if the ship is owned by a foreign shipping company.

• In the case of ships flying under the German flag (German Federal Navy ships), domestic lump sums are to be applied for days at sea.
• For the days of embarkation and disembarkation, the daily allowance applicable for the port location is applied.

Without overnight

If an employee begins a business trip on one day and ends it the following day without an overnight stay, the times are added together. If the absence is longer than 8 hours, the employee receives a meal allowance for the day on which they were mostly absent.

Rate of the last location

During a multi-day trip if an employee spends the night in one country but travels to a different country to work and then returns, they should receive the per diem applicable to the country they last worked in.

Professional drivers

Professional drivers receive an additional €9 for sleeping in their vehicle in the course of a multi-day trip.

The overnight flat rate is subject to the following conditions:

• It must be a business trip on a company vehicle (employer-owned or leased).
• Overnight accommodation will take place in the company vehicle.
• The overnight stay takes place on a calendar day for which the employee is entitled to a meal allowance of €14 for arrival or departure days or €28 for so-called intermediate days of an away assignment lasting several days.

It is still possible to provide evidence of higher actual costs for overnight stays in the vehicle at parking and rest areas. The employer has a choice. If he decides on the new overnight flat rate of €9, he is bound to this for the entire calendar year. He must decide uniformly for all travel days in a calendar year whether to use the flat rate or the individual proof.

Meal deductions

Meal deductions are always calculated from the full per diem amount, even in the case of half-day compensations. 

Three-month rule (“Dreimonatsfrist”)

The three-month rule (“Dreimonatsfrist” in German) begins once an employee has worked in the same place for at least three days in any given week and according to the following conditions:

• if the employee returns at least 1 day within the 28 days, the three-month rule continues;
• if there is an interruption of at least 28 days or four weeks, a new three month period will begin.

Once the three-month rule comes to an end, the per diem becomes taxable.

The three-month rule does not apply to professional activities on mobile, non-stationary facilities, e.g.:

• vehicles
• airplanes
• ships

Benefit in kind

Certain meals provided by the company are considered a “benefit in kind” as follows:

• a meal supplied as part of a training course, seminar, or conference arranged and paid for by the company;
• any meal arranged in advance by the company and paid for by the company or a third-party on behalf of the company.

If the meal exceeds €60 (incl. VAT) per attendee and no third-party is involved, then the value becomes taxable per employee in the following conditions:

• meals received during trips lasting fewer than 8 hours (or when no allowance is paid);
• meals received after the three-month period has ended. 

Source: Steuerliche Behandlung von Reisekosten und Reisekostenvergütungen bei betrieblich und beruflich veranlassten Auslandsreisen ab 1. Januar 2025

https://lsth.bundesfinanzministerium.de/lsth/2022/A-Einkommensteuergesetz/II-Einkommen/4-Ueberschuss-der-Einnahmen-ueber-die-Werbungskosten/Paragraf-9/inhalt.html

Employees travelling for business in Germany with their private vehicle may be entitled to a tax-free mileage allowance, the rates of which are as follows: 

 

Engine	Rate
Own car or other motor vehicle (KFZ)	€0,30 per km
Motorcycle, scooter, moped	€0,20 per km

 

Source: § 9 EStG - Einzelnorm 

 

Electronic archiving and retention period in Germany

When keeping books in electronic or paper form and other required records in electronic or paper form within the meaning of paragraphs 3 to 5, the following requirements must be observed:

• Principle of traceability and verifiability (see 3.1),

• Principles of truth, clarity and continuous recording (see 3.2):

  • Completeness (see 3.2.1),

  •  Individual recording obligation (see 3.2.1),

  • Accuracy (see 3.2.2),

  • timely bookings and records (see 3.2.3),

  • Order (see 3.2.4),

  • Immutability (see 3.2.5).

Paper documents are converted into electronic documents by means of image capture (see paragraph 130). The process must be documented. The taxpayer should therefore create an organizational instruction that regulates, among other things:

• who is allowed to record
• at what point in time it is recorded or should be recorded (e.g. when the mail arrives, during or after the completion of the transaction processing),
• which documents are recorded,
• whether visual or content-related conformity with the original is required,
• such as quality control for readability and completeness and
• how errors should be logged.

The specific design of this procedural documentation depends on the complexity and diversification of the business activity and the organizational structure as well as the IT system used.

Immediate data access (Z1) - The tax authorities have the right to access the IT system directly in such a way that they can view the data that must be recorded and retained in the form of read-only access and use the hardware and software used by the taxpayer or a commissioned third party to check the stored data, including the relevant metadata, master data and transaction data, as well as the corresponding links (e.g. between the tables of a relational database).

It may only access the electronically stored data using this hardware and software. This excludes remote queries (online access) by the tax authorities to the taxpayer's IT system.

Read-only access includes reading and analyzing the data using the evaluation options available in the IT system (e.g. filtering and sorting).

Indirect data access (Z2) - The tax authorities can also require the taxpayer to carry out a machine evaluation of the data that must be recorded and retained in accordance with their instructions or to have it evaluated by a commissioned third party in order to then be able to carry out read-only access. Only a machine evaluation using the evaluation options available in the IT system of the taxpayer or the commissioned third party can be required.

Data media transfer (Z3) - The tax authority can also request that the data that is required to be recorded and retained, including the relevant metadata, master data and transaction data as well as the internal and external links (e.g. between the tables of a relational database), and electronic documents and records be provided to it on a machine-readable and analyzable data medium for evaluation. The tax authority is not entitled to download data from the IT system itself or to make copies of existing data backups.

Taxable persons must retain invoices for 10 years.

An electronic signature or time stamp is not required for tax purposes.

Source: https://ao.bundesfinanzministerium.de/ao/2021/Anhaenge/BMF-Schreiben-und-gleichlautende-Laendererlasse/Anhang-64/anhang-64.html