Corporate events
Cost issues

Employees may often no longer be subject to PAYE deductions for events organised by their companies that last more than one day (federal finance court, VI R 151/99). So far, the tax authorities have automatically claimed a certain percentage as soon as employees attended corporate-internal events lasting over a day. "According to this court ruling, the length of such an event is no longer the sole deciding factor," says tax consultant, Lothar Siemers from PricewaterhouseCoopers, Düsseldorf. In future, the value of the event will be decisive for tax purposes. The tax exemption limit now lies at EUR 110.00 per head. Once this sum has been exceeded, the value of the total expenses will increase the taxable wage value. This practice as regards over-expensive trips was confirmed by the federal finance court (VI R 151/00). In the dispute in question, a CEO invited his employees to a skiing weekend trip " and protested against the due deductions, even though he spent more than the taxman allowed.

by Volker Votsmeier
www.capital.de / 23th January 2006