Ronald Robbi

Everyone knows it: there is the birthday, farewell or anniversary party to which you, as a managing director or executive, invite business friends and employees. Of course, you want the state to contribute to the costs and claim business expenses or income-related expenses as part of your tax return. In the past, however, the courts have been critical and dismissive of this approach.

In a ruling dated November 23, 2022 (Case No. VI R 50/20), the Federal Fiscal Court (Bundesfinanzhof, BFH) ruled in an employee-friendly manner that the reimbursement by the employer of telephone costs for a mobile phone contract concluded by the employee is tax-free pursuant to § 3 No. 45 of the German Income Tax Act (Einkommensteuergesetz, EStG) even if the employer initially acquires the mobile phone from the employee at a very low price and then immediately transfers it back to the employee for private use.

With effect as of the coming year 2023, the chain of communication between the employer, the employee and the health insurance companies will change in the event of an employee‘s absence from work due to illness.