One of the most frequently visited pages on my company’s website is an article about managing employee travel expenses in Germany. There are two primary reasons for the article’s popularity. First, there are only a few English-language resources on the subject of German travel expense reimbursement. Second, related regulations—and in particular those governing meal reimbursements—can be confusing and are often different from most organizations’ home-country rules.
The subject also comes up regularly in my meetings with clients and prospects. Germany is, after all, the largest economy in the EU and a top destination for U.S.-based multinationals. The country’s appeal will likely continue to rise in the wake of the Brexit referendum.
In any event, companies considering expanding to or already operating in Germany are naturally interested in staying compliant with local laws to avoid fines and reputational damage. In many cases, they’ve heard that staying compliant with Germany’s travel reimbursement laws can be challenging.
Among those who have some knowledge of the subject, it is a common misconception that German statutory tax law requires employers to reimburse employees for meals using per diem allowances. It is, in fact, common in Germany for employees to be reimbursed this way, and most workers expect it. But using per diems as a basis for reimbursing employees for meals is not, strictly speaking, required under local law.
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Based in London, Luigi Nicoletta is an expert in global mobility compliance. Nicoletta joined Radius in 2014. He started his career as a graduate trainee with KPMG in London, looking after high-net-worth individuals’ tax affairs in KPMG’s private clients team. He went on to specialize in international taxes for expats, including working two years at KPMG Milan and another two years at Ernst & Young in London.