No distance lump sum for journeys of a temporary worker to the hiring company due to lack of primary place of work
Work-related travel expenses are deductible as the highest mileage allowance in accordance with the German Federal Travel Expenses Act, based on the flat rates set for the means of transport (vehicle) used and the actual kilometres driven. However, an employee's daily expenses for travel between their home and their primary place of work are generally only deductible as income-related expenses for the one-way distance (distance lump sum) within the respective income category – at EUR 0.30 for the first 20 kilometres and EUR 0.35 (2021) or EUR 0.38 (2022 to 2026) for each kilometre from the 21st kilometre onwards. In its decision of June 17, 2025 (case no. VI R 22/23), the German Federal Fiscal Court (BFH) clarified whether, under certain conditions, a temporary worker can be permanently assigned to the business of a hirer as their primary place of work, meaning that their travel expenses to that location are only deductible at the distance lump sum.
The temporary worker was initially employed on a fixed-term basis and, as agreed, was employed by a temporary employment agency on a permanent basis from November 28, 2015 to August 31, 2018. The agency assigned him to the same hirer from February 2, 2015 to March 31, 2015 and again from April 1, 2015 to August 31, 2018, who then hired him on a permanent basis from September 1, 2018 onwards. Following an amendment to the German Temporary Employment Act (Arbeitnehmerüberlassungsgesetz, AÜG) on April 1, 2017, which stipulates a maximum period of 18 months for temporary employment, the temporary employment agency and the hirer concluded a new temporary employment contract which did not specify an exact date for the end of the temporary worker's assignment by adding the word ‘temporary’.
In his 2018 income tax return, the temporary worker claimed expenses for journeys to the hirer's place of business up to August 31, 2018 in accordance with travel expense principles based on the actual kilometres driven and, from September 1, 2018, based on the distance lump sum. However, the tax office only considered the travel costs in full using the distance lump sum in its assessment; it considered – as did the Fiscal Court hereafter – the hirer's premises to be the temporary worker's primary place of work. The BFH disagreed with this.
The existence of a primary place of work requires the employee to be permanently assigned to a fixed operational facility. This can be assumed – subject to the provisions of service and labour law and the agreements and instructions that supplement them – if the employee is to work at such a place of work on a permanent basis, for the duration of the employment relationship or for a period exceeding 48 months.
In the opinion of the BFH, permanent assignment based on the AÜG is generally not possible in the case of temporary employment relationships. This is because even under the version of the AÜG that was in force until March 31, 2017, the more than temporary – i.e. permanent or indefinite – assignment of temporary workers to hirers was prohibited. According to the version of the law in force since April 1, 2017, the permissible assignment period is even limited to 18 consecutive months. In this respect, in the opinion of the BFH, an indefinite assignment of the temporary worker was ruled out in the case in dispute, as was his corresponding permanent assignment to the hirer's business. In the absence of a primary place of work, the temporary worker's travel expenses were deductible in accordance with the German Federal Travel Expenses Act in the amount of the kilometres actually driven.
