143. Home Offices - Recent Developments

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The 1996 Tax Act drastically restricted the possibilities for deducting the cost of a room in one's private residence used for business or professional purposes (see article no. 23 sec. 4.2.1). No deduction at all is allowed unless more than half of all activity is conducted from the home office or if there is no other place of work available for the particular activity. If one of these tests is met, the deduction is still limited to DM 2,400 per year unless the home office is the "centre of the [taxpayer's] entire business and professional activities" (new sec. 4 (5) no. 6b EStG and revised sec. 9 (5) EStG).