Definition and concept of deployment-based activity
Die Deployment-based activity is a term in German tax and social security law, particularly relevant in connection with business travel expenses and related costs. It refers to a professional activity in which an employee is not permanently assigned to a fixed primary workplace, but instead regularly works at constantly changing locations outside a permanent establishment. The concept of deployment-based activity is especially significant in income tax law and is distinguished from other forms of professional activity, such as business trips and driving duties.
Legal basis
Income Tax Act (EStG)
According to Section 9 (4) of the Income Tax Act (EStG), expenses for commuting between home and the first workplace can only be claimed to a limited extent. However, individuals who fall under deployment-based activity generally do not have a permanently assigned primary workplace. In these cases, all work locations are treated as so-called “external work sites.” Consequently, employees can deduct all travel expenses incurred in this context in full as business expenses in accordance with the regulations for work-related external activities (§ 9 para. 1 sentence 3 nos. 4a, 4b EStG).
Administrative practice and case law
The definition and distinction of deployment-based activity rely heavily on administrative instructions from tax authorities (especially BMF letters) as well as related case law, particularly from the Federal Fiscal Court (BFH). The term was redefined with the introduction of the “travel expenses law” in 2014, when the concept of the “regular workplace” was replaced by the “first workplace.” Since then, the criteria for delimitation have continued to develop in tax law.
Key characteristics of deployment-based activity
Distinction from business trips and driving activities
- Business trip: Here, the employee performs their duties at various workplaces outside the first workplace, often as part of a short-term assignment.
- Driving activity: The performance of professional duties takes place predominantly in a vehicle (e.g., truck drivers).
- Deployment-based activity: The employee performs their work without permanent assignment to a fixed company facility, but repeatedly at various sites (e.g., construction workers, fitters, service technicians).
Duration and regularity
A deployment-based activity is generally present when work is performed not just temporarily, but regularly at different workplaces. Assignment to a specific location generally requires a duration of more than 48 months before it is considered the first workplace.
Company establishment
A company establishment is any stationary operational center of the employer, such as company premises or an office building. If there is no permanent assignment to such a facility, this is an indicator of deployment-based activity.
Tax treatment of deployment-based activity
Travel expense accounting
In the case of deployment-based activity, employees have the option to claim all costs incurred in connection with the external activity (travel costs, additional meal allowances, accommodation expenses, ancillary travel costs) as business expenses. Deductible are the actual costs as well as the tax-recognized flat rates for additional subsistence and accommodation costs (§ 9 para. 1 sentence 3 nos. 4a, 4b EStG).
Reimbursement by the employer
If the employer reimburses the costs within the scope of tax regulations, these amounts are tax-free for the employee (§ 3 nos. 13 and 16 EStG). If amounts are paid that exceed the statutory allowances, the excess is treated as taxable income.
Particularities in cases of double housekeeping
Employees with deployment-based activity may, under certain conditions, also claim expenses related to double housekeeping, provided that a job-related secondary residence near the respective deployment locations is necessary.
Aspects under social security law
In the area of social security law, deployment-based activity particularly affects the calculation of income subject to contributions when reimbursing travel costs. In contrast to tax regulations, social security recognizes differentiated limits for the preferential treatment of travel expenses. What is essential is whether an external activity exists under social security law and whether the travel expense reimbursement is tax-free, in order to avoid social security consequences.
Typical applications
Construction and assembly professions
Deployment-based activities are widespread in the construction industry, in assembly work, and in trade fair construction. Employees who regularly work at various construction sites or projects typically fall under this regulation.
Field service and service assignments
Also, in service and maintenance jobs as well as in sales field service, there is often no permanent first workplace, so the requirements for deployment-based activity are met.
Practical implications for employees and employers
Employees with deployment-based activity can usually claim higher business expenses and benefit from more favorable tax treatment than those with a permanent workplace. Employers can reimburse travel expenses tax-free, provided the statutory limits are observed. Correct assessment by payroll accounting is therefore essential to avoid payroll tax and social security risks.
Distinction and special cases
Project-based assignment at the same location
If an employee is assigned to a single job site for the duration of a particular project, it must be determined whether this constitutes a first workplace. The decisive factor is whether a permanent assignment takes place. In the absence of such assignment, the activity remains classed as deployment-based.
Meeting point regulation
For employees who regularly first report to a specific location (e.g., company yard, storage area) before departing for changing sites, this meeting place may under certain circumstances be classified as the first workplace, which affects the tax assessment.
Summary
Deployment-based activity is a central concept in German payroll tax and social security law, particularly applicable to employees with changing workplaces. It ensures tax benefits with respect to the full deductibility of travel expenses and affects the treatment of employer reimbursements. Correct classification and distinction from other forms of professional mobility is of considerable significance from both a tax and social security perspective and requires careful individual assessment.
Note: The information presented reflects the legal position up to 01.01.2024. Legal provisions may change; a final assessment in the specific individual case is always required.
Frequently asked questions
To what extent are travel costs recognized for tax purposes in a deployment-based activity?
In the case of deployment-based activity, travel costs are generally treated as business travel expenses. This means that employees can, when traveling to constantly changing worksites, claim the actual costs for using public transportation or—when using their own vehicle—€0.30 per driven kilometer as business expenses (§ 9 para. 1 sentence 3 no. 4a EStG). A deduction using the distance allowance is not permitted here, since there is no regular workplace. Detours and, if necessary, essential parking fees can also be claimed if they are work-related and the employee has neither a meeting point nor a first workplace. If the employer reimburses travel costs, these reduce the amount deductible as business expenses accordingly.
How are additional meal expenses considered during deployment-based activity?
In the case of deployment-based activity, there is in principle a claim for the deduction of additional meal expenses, provided the time absent from home and, where applicable, the company exceed the legally defined limits (§ 9 para. 4a EStG). For single-day absences of more than 8 hours, €14 per day can be claimed; for multi-day business trips, €28 per day. Arrival and departure days for multi-day assignments are granted €14 each, regardless of actual absence time. It is important to note that claims can only be made for days without a first workplace, when an external site is visited. If the employer provides meal allowances or meals, these must be credited for tax purposes.
Which accommodation costs are deductible under deployment-based activity?
Accommodation costs can be claimed as business expenses in the context of deployment-based activity if an employee must stay overnight away from home for professional reasons. In principle, the actual costs for accommodation and lodging (hotel, guesthouse, apartment at the site, etc.) are reimbursed, but only for the duration of the actual deployment-based activity. Limits such as those for double housekeeping (e.g., €1,000 per month for rental expenses) do not apply here unless the assignment turns into double housekeeping. Employer payments must be offset against deductible expenses.
How does employer reimbursement affect the deductibility of expenses?
If expenses for travel, meals, or accommodation within the framework of deployment-based activity are reimbursed tax-free by the employer, no further deduction as business expenses is possible for that amount (§ 3 nos. 13 or 16 EStG). Tax credit rules ensure that a tax advantage is not claimed twice. If the employer only reimburses part of the costs, the difference can be deducted as business expenses. The respective limits and documentation requirements remain unaffected. For lump-sum employer payments, it is necessary to check whether these exhaust the tax-allowable maximum amounts; otherwise, an additional deduction as business expenses may still be possible.
What documentation is required for tax purposes in deployment-based activity?
For tax recognition of business expenses within deployment-based activity, seamless and comprehensible documentation of the work assignments and the resulting costs is necessary (§ 9 EStG). Employees must be able to provide evidence such as work schedules, logbooks, travel expense accounts, or hotel bills to substantiate each business trip and related costs. If detailed proof is missing, reductions or disallowance of claimed business expenses can result. For certain matters, such as flat-rate meal allowances, a credible record of travel data (date, destinations, duration, reason) suffices.
Is there a time limit for the tax deduction of travel expenses for deployment-based activity?
The tax deduction options for travel expenses resulting from deployment-based activity generally apply without time limit, as long as no “first workplace” within the meaning of § 9 para. 4 EStG is established. There is thus no time restriction (e.g., as in double housekeeping, where deduction for accommodation ends after 48 months) for deployment-based activities. The benefits of travel expense reimbursement only cease upon permanent assignment to a workplace, at which point the distance allowance applies and extra expenses for meals or accommodation are discontinued. Case law and legislation regularly emphasize the importance of continued changes in work location.
What should be considered with several consecutive deployment sites within a short period?
If, within the framework of deployment-based activity, several sites are visited one after the other, the travel costs between these locations are also deductible as travel expenses. The requirement is that there is no permanent assignment to any of the sites. Accounting is based on the actual travel kilometers or incurred costs, even within a single day. Additional meal allowances may be claimed for these intermediate legs within statutory limits, provided the total absence from home and, where applicable, the company exceeds the minimum periods. It is crucial to maintain meticulous travel records and to clearly identify the business purpose for every individual change in work location.
