The German government is planning tax breaks for people working from home

The German government is planning tax breaks for people working from home

The government of German Chancellor Angela Merkel announced on Monday that she was planning tax breaks for people working from home during the coronavirus pandemic. The aim is to offset their higher costs for heating, electricity and other bills. Merkel's coalition has agreed on a proposal that will allow employees working from home to reduce their billing tax by € 5 for each working day, up to a maximum of € 600 per year.

More than half of Germans can work from home

Finance Minister Olaf Scholz said the proposed legislation, which is due to be approved by parliament in December, is "good for employees" and "does not pose a major fiscal challenge for the German state." According to the current law, only those who had one room reserved exclusively as an office could reduce their taxes when working from home. But as millions of people have had to leave their offices and work from their living rooms and kitchen tables due to the pandemic to reduce the risk of transmitting COVID-19, there has been a growing demand for tax relaxation. Ifo's calculations show that approximately 56% of German employees can potentially work temporarily from home. The existing law "no longer correlates with the current working world," said coalition MP and tax adviser Sebastian Brehm. The planned tax reduction thus represents a "flexible response" to this situation, he added.