Employees in Germany can continue to claim tax breaks for working from home in 2022, the cabinet has agreed. The 5-euro-per-day “home office allowance” scheme will be extended.

Germany’s working from home allowance available in 2022

In a bid to offset the extra costs incurred by employees who were forced to switch to the home office when the coronavirus pandemic first broke out in 2020, the federal government agreed to implement a so-called “home office flat rate” allowance that let employees deduct 5 euros for every day they worked from home on their annual tax returns, up to a maximum of 600 euros per year.

The federal government has now agreed that the scheme will be extended into 2022, meaning that employees can deduct five euros for each day worked from home from their annual tax bill - regardless of whether you work in a separate “home office” or from your kitchen table. The scheme's 600-euro maximum deduction limit on taxes will remain the same.

Tax return deadlines extended for tax advisors

The cabinet also signed off further tax relief for companies that lost out financially during the pandemic, as well as giving them more options for offsetting COVID-related losses against profits from previous years.

“This is a contribution to stabilising the economic recovery and helping to strengthen the economy,” said Christian Lindner, Germany’s Federal Finance Minister. “I would like to do what is best for small- and medium-sized businesses, crafts and industry as a whole.”

Meanwhile, tax advisors have been given an extra three months to submit their clients’ 2020 tax returns, after the deadline was extended last year. The new cut-off date for submitting 2020 returns is May 31, 2022. The deadlines for 2021 and 2022 tax returns will also be extended.