Peter Scheller
Berater für Wirtschaftsprüfer, Rechtsanwälte, Steuer- und Unternehmensberater

„Wenn es knifflig wird.“

Deductible relocation expenses in Germany

von Peter Scheller

Deductible relocation expenses in Germany

Employees can deduct relocation expenses from their taxable income if these costs are job or work-related. Alternatively, the employer may reimburse those expenses free of tax. If the employer does not reimburse all relocation expenses, the employee is entitled to deduct additional costs in his or her German income tax return.

Relocation expenses are work-related if

  • the distance between home and the workplace is significantly reduced. This is the case if daily travelling time in total is reduced by at least one hour
  • a new home is required because the employee is working for the first time
  • the relocation is caused by working for a new employer or taking a new profession or job
  • the relocation is in the predominant interest of the employer or
  • a work-related, so called double household, is set-up or terminated.

Expenses for privately motivated relocations cannot be deducted for tax purposes. If an employer reimburses privately motivated expenses, this benefit will be subject to wage tax and social security contributions.

A relocation back home is work-related if

  • the employee has been assigned for a fixed period of time or
  • a work-related, so called double household, is terminated.

The following expenses can be deducted or reimbursed by the employer free of tax:

Transport of household goods

All expenses related to the transportation are deductable. This also applies for substantiated payments to privately supported individuals. The employer can reimburse these costs free of tax.

Travelling costs

The following expenses are deductable:

  • costs of transport (flight, train, car etc.)
  • extra expenses for food and drink (flat-rate amounts / lump sums)
  • costs of accommodation
  • other travel-related expenses

The employer can reimburse travelling costs of the employee, his or her children and other individuals who belong to the household.

The employer can reimburse costs directly related to the relocation. But, he can also reimburse costs for travelling to the new working place beforehand if the employee is searching for a new home or visiting a new flat. The employer can reimburse expenses for

  • two journeys if only one person is travelling or
  • one journey if two persons are travelling.

Compensation for additional expenses in connection with rented homes

The following rents are deductable and reimbursable for

  • a flat or home if the rental contract cannot legally be cancelled before the relocation takes place or
  • the new flat, if this flat had to be rented before the relocation date (for example because of maintenance work).

Other relocation expenses

Other expenses and costs are deductible or reimbursable. They are for example:

  • broker fees for procuring a rented flat or home (this does not apply for the purchase of an own home or flat)
  • additional costs for educating children, if connected to the change of address

Other relocation expenses can be deducted or reimbursed free of tax if certain requirements are met. It is possible to reimburse or deduct certain lump sums or actual costs, if documented.

International relocation expenses

International relocation expenses in this respect are

  • relocation between Germany and another country and
  • relocation outside of Germany

Relocation from another country to Germany connected with a new employment in or an assignment to Germany, are not considered to be an international relocation if the former or future home is situated abroad. For example: If a foreign citizen is employed by a German employer and therefore moves to Germany, this is not considered to be an international relocation.

The distinction between domestic and international relocation is of significance because relocation allowances and lump sums for international relocations are significantly higher than for domestic ones. There are various allowances and lump sums:

  • international relocation outside of the EU (USA, Switzerland etc.)
  • international relocation within the EU
  • relocation in connection with returning to Germany

Taxation of the employer

Reimbursed relocation expenses are deductible as business expenses, regardless of the fact if reimbursements have been tax exempt or not.

The employer can credit input-VAT against his own VAT if

  • actual costs have been reimbursed
  • invoices can be presented which are in line with legal requirements and
  • invoices show the employer as the recipient of the service and German VAT is shown on the invoice.

Foreign VAT might be refundable abroad.


Relocation expenses Umzugskosten
Travelling expenses Reisekosten
Value added tax   (VAT) Umsatzsteuer (USt)

Author: Peter Scheller, German Tax Adviser – Master of International Taxation




Kommentar von Paul Ogle |

Hello. My partner will end her contract with the Bavarian International School in Munich at the end of June. We will be looking for someone to transport our belongings back to New Zealand (our home) and will look at getting a 20'container. BIS has said that we must pay tax on our flights back home for myself and our children from Germany to NZ. They wrote: "if the flights are taxed at € 4.000, you pay € 1.460 tax. You will receive a net payment of € 1.018.
If you are taxed at € 3,000 on the moving costs, you pay € 1,954 tax. You will receive a net payment of € 1513". Could you please confirm such a statement? And then we can progress with our move. Please note that in the contract there was no mention at all about paying taxes for our flights back home (Section 12). In section 11, they did mention that taxes must be paid on shipping costs and this will be taken out of her wages. This seems a little odd that it wasn't included in the contract don't you think? Best regards and stay healthy, Paul Ogle

Taxation is spread over 2 months.

Antwort von Peter Scheller

What kind of tax do they talk about (VAT, Luftverkehrssteuer) ?

The next question is why you have to pay the tax. However, I do not know your wife's contract.

Kommentar von Gabriel |

Hello, I moved to Germany last year as I was offered a job. Now I am looking at deducting some moving expenses for my relocation. Is this possible?
It is a bit confusing in this article the fact that a man moving for work in Germany is not considered international relocation.

“ Relocation from another country to Germany connected with a new employment in or an assignment to Germany, are not considered to be an international relocation if the former or future home is situated abroad. ”

If my case can be considered international relocation, how can I make that clear in my tax return? Are the old and new addresses enough for the Tax Office?

Antwort von Peter Scheller

You can claim certain allowances (national relocation) but not the higher ones on international relocation.

Kommentar von Junaid Qamar |

I live alone in Munich and work for an IT company.

I am offered a job in Berlin with moving relocation expense budget of 2000EUR.

But my employer said that my temporary residence in Berlin for the first 3 months will not be tax free. Meaning i will not be reimbursed with full amount of 2000EUR even if i claim my rents.

Please guide.

Antwort von Peter Scheller

I am not give advice on this Website. You should ask your employer hat he really means.

Please see also:

Then you might require the professional help of a German tax adviser.

Kommentar von Aleks |

I have relocated to Germany from France for new employment. My work contract started on the 1st of January 2020. When I am supposed to do the tax return for relocation costs, in the form for 2020 or 2019 (I relocated on the 27th of December 2019, but received my tax number in 2020).
Thank you!

Antwort von Peter Scheller

It depends whether you paid for the expenses 2019 or 2020.

Kommentar von asafa |

Hello Mr Peter,
I moved from abroad to Germany, my employer paid for the travel and temporarily accommodation, I have found that those expenses have been declared on line [21] of my Lohnsteuerbescheiningung (second households expenses tax-free), but I have not sustained those expenses directly so they do not have a corresponding costs in my declaration, How should I proceed?

Antwort von Peter Scheller

If they have been paid tax-free you do not have to declare them in your tax return as expenses. However, you may be able to claim for relocation expenses which has no been paid by your employer (such as certain lump-sums).

Kommentar von Dinesh |

I was moved to Munich from cologne on 27th oct 2020 traveled multiple times in DB Train (cologne to Munich)to pick my luggage and stayed in friend Home for 2 months. Officially made an agreement to new home on 1st Jan 2021. Still my cologne address I am paying rent for cologne home as the contract will end on March 2021. Can I claim relocation expense as I travelled between cologne to Munich to shift my luggage. Shall I claim flat relocation expense without bill.please suggest

Antwort von Peter Scheller

Has to be investigated in more detail.

Kommentar von Maria |

I moved to Leipzig in September as I had a job offer. Before that I was registered in Bavaria for one month, and before Bavaria I was in Austria. Which expenses could I justify? I was living in Austria and I had to register in Bavaria before moving to Leipzig so I could get a social number, otherwise I couldn't. Also I am not sure if I have kept all the necessary receipts for moving. PLZ help

Antwort von Peter Scheller

You already read the article. You should consult a tax adviser in order to optimize your tax situation.

Kommentar von Warren |

I will move to Germany from other EU country for new employment. and I'm wonderting for deducting some moving expenses for my relocation. However the invoice issued by other EU company with other EU VAT for moving.In my case, can I able to claim for relocation expenses? Thank you in advance.

Antwort von Peter Scheller

You cannot reclaim the foreign VAT. For the rest you find the information in the article.

Kommentar von Neha |

Hi, I am relocating from Hannover to Dresden because my company moved. The company has offer to reimburse upto 4000 euros for this relocation. What all can I use this money for apart from hiring the moving company? I am new in Germany and I donot know the laws. Any information is highly appreciated.

Best regards,

Antwort von Peter Scheller

The basics you may see in the article. If you need more information you have to consult a tax adviser.

Kommentar von Karun |

Hi ,I recently moved from aboard to Germany , relocation costs of about 2000 euros was mentioned in the offer letter, Does this relocation costs include my temporary accommodation rent or is it only used for travel expenses.

Best regards,

Antwort von Peter Scheller

Temporary accomodation costs are tax deductible to a certain extent.

Please contact a tax adviser to get this sorted out properly.

Kommentar von Yurii |

Hello, I moved to Germany for a work recently and now I'm renting a new apartment. Is buying new furniture
for this apartment treated as relocation expenses and can it be deducted?

Antwort von Administrator

If the funiture is work-related (desk, office chair etc.) the expenses are fully deductible. Expenses for private used funiture can be deducted up to certain lump sums.

You have to speak to your tax adviser about it

Kommentar von Anteo |

Hi! I am moving from my company's US entity to the parent company in Berlin, Germany. They are providing me with a relocation budget of 886€. Can I use this to pay a housing broker in Berlin for a rental flat? This brokerage fee will be higher than my budget. Would it still be reimbursable?
Alternatively, can I use the budget to ship some of my belongings from the US to Germany?

Antwort von Administrator

If it is a lump-sum payment you can use it for whatever you like.

Kommentar von Anteo |

It would not be a lump-sum payment. I would pay for it and then submit it for reimbursement. I am wondering if the expenses above would qualify for reimbursement. Thanks!

Antwort von Administrator

How you use the lump sum is irrelevant.

Kommentar von jabeen |

Ich bin für ein Praktikum von Indien nach Deutschland gezogen. Meine Firma hat mir die Reise von Indien nach Deutschland steuerfrei erstattet. Allerdings wurde die Rückreise nicht erstattet. Kann ich das in der Steuererklärung geltend machen?

Antwort von Administrator

Ja, wenn sie nicht privat sondern durch die Tätigkeit veranlasst sind.

Kommentar von JohnnyOne |

Hi! Interesting article. In June 2023, I have moved to Germany from a foreign country (from EU). Can relocation expenses be deducted? If not, can a second relocation within Germany (moving from temporary apartment to long-term) be deducted?

Antwort von Administrator

Yes, if the expenses are work-related.

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