Tax law in Germany strictly distinguishes between income-related expenses,"Werbungskosten", and special expenses, Sonderausgaben. Some of these special expenses are deductible in full and some only partially. For simplification, this distinction will not be discussed here. Your attorney or tax advisor (Steuerberater) will professionally deal with this. The difference between both kinds of deduction is that only income-related expenses can create a negative result for taxation. Sonderausgaben do not create negative income. A typical example will be if you are laid off. You have no income but expenses for job applications, which can give you negative income.



As I understand, my taxable income is the difference between income minus work-related expenses. What are these expenses?

Generally, expenses for traveling to work (single/monthly/yearly public transportation tickets, or car mileage), books, equipment, further education etc. can be deducted. It also depends on what your profession is and how you present it to the tax office. A sports teacher, for example, might have a problem to deduct a computer but not an English teacher. Glasses for computer work (computer-glasses) are normally not deductible because glasses are routine private expenses. But you could ask your boss to reimburse you for the glasses and the reimbursement will be tax-free if an eye test shows that you need the glasses to work effectively at the computer (BMF, Letter of February 3. 2000, IV C 2 – S 2144 – 10/00).

Commuting by car daily to and from work. Are these costs deductible?

Generally, yes. However, the costs of private life are not deductible. You have two methods to deduct the private share of motorization costs. You may keep the list price or keep a log book. The list price is the domestic price of a car at the date of its first registration. You can deduct, following this method, 0,03% of the list price for each calendar month. Should you decide to keep a logbook, you  must detail all trips with date, mileage and reason of travel. If you are traveling privately, just put in “private” and that suffices. The tax authority has no right to demand knowledge of your private life! There are forms available in stationary shops.

Additional information