Taxi journeys between home and workplace only deductible with distance lump sum

The daily expenses of an employee for journeys between home and workplace are in principle to be assessed at a lump sum for each full kilometre of distance, irrespective of which means of transport is used. Currently, a value of EUR 0.30 is provided for the first 20 distance kilometres and a value of EUR 0.35 (assessment period 2021) and EUR 0.38 (assessment periods 2022 to 2026) from the 21st distance kilometre onwards. Within the scope of this so-called distance lump sum (Entfernungspauschale), all expenses of the employee for travel between home and workplace are compensated. However, an exception applies to the use of means of public transport. In this case, the employee may also use higher actual costs instead of the distance lump sum. The Federal Fiscal Court (Bundesfinanzhof, BFH) took a position on the legal question whether a taxi is such a favoured means of public transport in its ruling of June 9, 2022 ( Case No. VI R 26/20).

In the case in question, an employee with a degree of disability of 60 % without special characteristics was unable to drive a car safely himself and therefore used a taxi to travel between home and the workplace. He claimed the actual costs incurred for this as a reduction of his income from employment. The tax office only recognised expenses in the amount of the distance lump sum as income-related expenses, which was ultimately confirmed by the Federal Fiscal Court.

The term means of public transport is not defined in the German Income Tax Act. However, it follows from the environmental and transport policy reasons underlying the distance lump sum that only means of public transport in regular service and not also means of transport generally available to the public, such as taxis, fall under this definition. This is because local public transport typically carries a large number of passengers at the same time and without the possibility to organise the journey according to a timetable. In contrast, when using a taxi, the journey is individually designed, i.e., the journey time and destination can be freely determined, and often - as in the case in question - only a single passenger is transported. The travel costs for the use of a taxi are therefore treated in the same way as travel costs for the use of one’s own car; they are only deductible at the amount of the distance lump sum and not at the actually higher costs. Moreover, a taxi is also not suitable for promoting environmental and transport policy goals to the same extent as the use of public transport in regular services.

The fact that the employee in the case in question could not safely drive a car himself and had therefore chosen to use a taxi to travel between home and the workplace is not sufficiently proven with a degree of disability of 60% without further official evidence of a considerable impairment in the freedom of movement in road traffic. Such an impairment is only assumed with a degree of disability of at least 70%. The statutory possibility for persons with disabilities to deduct the actual expenses - and thus also taxi costs - for the journeys between home and the workplace as income-related expenses is therefore not given in the case in question.