2515640 - In Germany There is a Flat Rate Taxation of Meals Per Diems Due to The Three Month Rule

SAP Knowledge Base Articles - public

2515640 - In Germany There is a Flat Rate Taxation of Meals Per Diems Due to The Three Month Rule


You can see that in an Expense Report for a Two-Day-Trip in between Germany there is a Flat-Rate-Tax which should not be there. On the first day a full Per Diem is deducted which is correct. On the second day, breakfast is deducted. From this breakfast a Flat-Rate-Tax is calculated which seems to be incorrect, you expect that this is tax-free.

Reproducing the Issue

  1. Go to the Postings Work Center.
  2. Show Posted Reports.
  3. Under the Expense Report ID enter XXX (where XXX represents the Expense Report ID) and press Enter.
  4. Highlight Expense Report ID / Version XXX.
  5. In the last entry you can see a Flat-Rate-Tax of YYY EUR (where YYY represents the amount in EUR) from Cost Center ZZZ (where ZZZ represents the Cost Center ID) which should not be there.


The Expense Report is exactly on the date where the Taxation of an Expense Report Meal per Diems due to the Three-Month-Rule begins: the Per Diem for the first day is still tax-free, while the Per Diem for the second day is taxable. As you cannot deduct a Breakfast from the Tax-Free-Amount on the second day (as this amount is already zero) this implies that for this date the breakfast deduction must be handled as a benefit-in-kind-amount of YYY EUR (where YYY represents the amount of benefit-in-kind) subject to Flat-Rate-Tax.

The Three-Month-Rule is a specific law only applying in Germany and means that the Employer may reimburse Per Diems tax-free to an employee for a maximum period of three months. In our case the Three-Month-Period has ended on the first day and on the second day the Taxation started.

In the system you can check this as follows:

  1. Go to the Postings Work Center.
  2. Search for Employee ID XXX and press Go.
  3. You can see a couple of Expense Reports under column Posting Date from the last 3 months within Germany.
  4. You can see as well that the very last Expense Report starts at the Day where the Three-Month-Rule begins: the first day is still tax-free for Per Diems, the second day falls under the Flat-Rate-Tax since this day lies after the tax-free three months.

More information can be found here: https://www.radiusworldwide.com/knowledge/country-compliance-alerts/2014/4/germany-managing-employee-travel-expenses


This is designed System behaviour and is conform to the Legislation in Germany.


KBA , SRD-CC , Cross Components , How To


SAP Cloud for Travel and Expense all versions