Anyone who, as a self-employed person or freelancer, works in a different location during the week and maintains a second home there is familiar with the question: Which costs can be claimed for tax purposes? In a recent judgement dated 19 May 2026, the Federal Fiscal Court (BFH) addressed precisely this situation and established important principles regarding the maintenance of two households by the self-employed (Ref. VIII R 15/24).
An overview of the facts
A self-employed person lived in the town of K but worked almost exclusively for a single client at the client’s premises in H, where he worked four days a week. During this period, he rented a flat in H. He also used a vehicle, more than 50 per cent of the time for business purposes. When calculating his profits, he deducted both the rental costs for the flat in H and all vehicle costs as business expenses.
The tax office did not accept this in full. It reduced the travel expenses to the so-called distance allowance and also disallowed parts of the additional meal expenses. The self-employed person took legal action but lost his case both before the tax court and before the Federal Fiscal Court.
What the Federal Fiscal Court ruled
The Federal Fiscal Court (BFH) confirmed that, in this case, the maintenance of two households was work-related. This has tax implications that are not always immediately obvious: journeys home to visit family – that is, journeys between the place of work and the taxpayer’s actual place of residence – may not, in principle, reduce profits without limit. Instead, there is a limit based on the mileage allowance, similar to that for employees.
The following conditions apply to self-employed persons, as the Federal Fiscal Court (BFH) has expressly clarified:
- The self-employed person must maintain their own household outside the town or village where they carry out the majority of their work.
- He must also live in the area where his work is based, i.e. have another place to stay there.
- Journeys between the place where the main part of one’s work is carried out and one’s own home are regarded as journeys home to visit one’s family.
What is a permanent establishment in this context?
The Federal Fiscal Court (BFH) has also clarified that the concept of a ‘permanent establishment’ under the travel expenses legislation for the self-employed must be determined independently. It is not based on the concept of the so-called ‘primary place of work’, which applies to employees. A permanent establishment in this sense requires a fixed, permanent business facility which the taxpayer visits on an ongoing and regular basis. The decisive factor is the geographical centre of the permanently established business activity.
In this specific case, the self-employed person had his sole place of business in H. It was therefore also clear that this was where the main focus of his work lay. The Federal Fiscal Court (BFH), however, left open the question of whether a permanent establishment at the place of work is, in principle, a prerequisite for the assumption of a dual household arrangement in the case of self-employed persons. This question did not need to be answered in this specific case.
What does this mean in practice for the self-employed?
Freelancers or self-employed people who maintain a second home at their place of work should carefully check which costs are deductible and to what extent. Rental costs for the second home can generally be claimed as business expenses. However, where travel costs between the place of work and the home are concerned, the mileage allowance serves as the upper limit. It is not possible to claim the full amount of all actual vehicle costs in such cases.
As the tax treatment of such situations can be complex on a case-by-case basis, it is advisable to seek personalised advice from a tax adviser.
Source: Haufe: Tax
This post and the accompanying image were created with the help of AI and have been editorially reviewed.
