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What changes in 2020 for employers with personnel in Germany?

As is often the case, new rules come with the new year for employers in 2020. In Germany, too. Do you have employees in Germany? Then please read on with due attention!

Value added tax and company cars

First and foremost, a key point of attention about company cars in Germany. In contrast to many other countries, making a company car available to an employee in Germany often results in VAT liabilities.

Why?
Since 1 July 2013, a European directive applies relating to value added tax. Pursuant to this directive, renting or leasing vehicles to non-entrepreneurs (such as employees on your payroll) for longer than 30 days means that the residential address of such persons is classed as the lease location. The German Ministry of Finance classes making a company car available to an employee for longer than 30 days as long-term lease if the employee is permitted to use the car for private purposes too.

Implications?

  • As an employer in Germany, you are liable for VAT if you make a company car available to an employee on your German payroll if your employee is also permitted to use this car for private purposes.
  • In that event, you are subject to mandatory registration for value added tax in Germany and you are required to file an annual value added tax return accordingly.

At your request, from 2020 onwards, Interfisc is able to take care of such VAT registrations and administrative requirements in combination with the German payroll administration for you. That means having a single point of contact for your full German accounting.

In 2020, the fixed expense allowance for business travel will be amended in Germany

From 1 January 2020, you may pay out the following net amounts for business travel within Germany to employees on your German payroll:

  • € 28 for a 24-hour business trip (leaving from home or office). This was previously € 24
  • € 14 for the day of departure and the day of returning. This was previously € 12
  • € 14 for a business trip of more than 8 hours without overnight stay. This was previously € 12

Updated ceilings for German social security in 2020

The ceiling amounts for the calculation of social security contributions in Germany are updated annually in January; also this year in January 2020.
Click here for a list of the new ceiling amounts.

Final notes

This is just a selection of the changes to be implemented in 2020. Do you have any questions? Or do you need advice? Please do not hesitate to contact us.

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Since 1972, Interfisc has offered international HR & Payroll solutions in the Netherlands, Belgium, Germany, France, the United Kingdom, and Italy. We do this from our offices in the Netherlands and Belgium, and with an international team of around 45 committed and caring employees. 

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