Weismann Tax Firm

Elena Weismann
Graduate Economist, Tax Consultant
Certified Consultant for International Tax Law

Company events: Cancellations are not taxed at the expense of employees taking part in company events.

by Elena Weismann in News from tax law

The Cologne Financial Court has ruled that the number of participants actually registered should be used to determine the proportion of the taxable income (lohnsteuerpflichtigen )from a company event.(Subsequent) Cancellations or the non-appearance of individual employees are therefore not detrimental to the participating employees. In the deciding case, an employer had planned to hold a common cooking course as part of the Christmas celebration, inviting all employees. In fact, 25 employees took part in the celebration after which two of the registered employees cancelled at short notice. In order to calculate the tax base under wage tax law, the employer divided the total costs of the Christmas party by the number of registered employees and not by the number of participating employees. The court confirmed this view and thus expressly opposed the nationwide directive of the Federal Ministry of Finance. Thus, the additional costs of the event as a result of non-participating persons were a wasted expense for the employer due to services not claimed. These empty costs lack enrichment for the employees participating in the event. The Federal Fiscal Court must make a final decision.

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