Deducting Expenses Without Receipts – What Are the Thresholds for Non-Objection?

As a general rule, you must have the appropriate receipts for all items listed on your tax return. After all, the tax office wants to ensure that you do not provide false information that cannot be verified later. As tax advisors, we therefore recommend that all our clients keep a corresponding receipt for every expense they report (this does not have to be in paper form; we also advise you on digital bookkeeping). Tax returns often include expenses that are very small and have virtually no effect on the tax liability. One might therefore ask whether the effort required to verify these entries is not greater than their actual value. The tax authorities have asked themselves exactly this question regarding certain sections of the tax return. To resolve this dilemma, there are so-called non-objection limits. In this article, we explain what these tax limits entail.

What are non-objection limits?

We have already described the underlying issue in the introduction. For some expenses, it simply isn’t worth checking with receipts whether the information is actually correct. Non-objection limits are intended to ease the burden on both taxpayers and the tax authorities. No-objection limits are a flat-rate limit. For certain expenses, this limit specifies the maximum amount up to which no supporting documentation needs to be provided. So, if the reported expenses are below the no-objection limit, a receipt is not required.

Legal Issues with Non-Objection Limits

Although the no-objection limits initially sound like a wonderful way to simplify the process, there is unfortunately a small catch. The fact that tax offices adhere to these limits is based on an internal administrative directive. There is no legal basis that establishes the no-objection limits. What does this mean for taxpayers? First, the non-objection limits are widely recognized and observed. In practice, tax authorities will use these limits as a guide. The problem, however, is that as a taxpayer, you have no legally guaranteed right to these limits.

If you base your tax return on the non-objection limits, it is therefore possible that the tax office may still request documentation in individual cases. If you do not have the appropriate documentation on hand, the expenses may not be recognized. You have no legal recourse against this decision by the tax office. However, there are also no legal consequences for the taxpayer to fear.

In general, the de minimis rules are accepted in practice without issue and are not contested. Nevertheless, you should keep in mind that in the event of a dispute, there is no legal basis to challenge the tax office. Since the expenses falling under these limits are small amounts anyway, the loss is not too significant in case of doubt.

What are the non-objection limits?

Now that the key principles of the non-objection limits have been clarified, we would like to discuss the individual limits below. The following points pertain exclusively to income-related expenses.

1. Limit for work equipment

In the past, there was indeed a legally established non-objection limit for work equipment. Unfortunately, this was repealed in 1998. Consequently, there is no longer a legally valid limit for work equipment today. Nevertheless, the non-objection limit for work equipment still applies. Work equipment, such as stationery, computers, work clothing, or professional literature, can be claimed as income-related expenses up to a value of 110 euros without a receipt. Work equipment is a classic example of the non-objection limits and is therefore recognized by most tax offices without issue.

2. De minimis rule for account maintenance fees

Most people have a bank account. The costs for an account are at a comparable level at major banks. Therefore, it makes perfect sense that there is also a de minimis limit for account maintenance fees. The limit is 16 euros. If the reported costs are below this amount, they can be claimed without a receipt. Theoretically, you can even claim this amount for a free account. Of course, it’s important to note that the limit applies to only one account. It is therefore not possible to enter five accounts with the 16-euro limit. In this case, the costs would be added together and thus exceed the amount.

3. Costs for a business trip

Often, the costs of a business trip are covered by the employer. As a result, these are generally not relevant for the tax return. In some cases, however, the costs are borne in part or even in full by the taxpayer. In this situation, the expenses can be entered on the tax return. Up to a total of 250 euros, the de minimis rule applies. For a short and inexpensive business trip, therefore, no receipts need to be submitted within the de minimis limit.

4. De minimis rule for job application costs

A good job application incurs costs. If you do not wish to enter every small expense with a corresponding receipt, you should adhere to the no-objection limits. For a job application sent by mail, up to 8.50 euros can be claimed without a receipt. For a job application sent by email, the costs tend to be lower, so only up to 2.50 euros should be claimed.

5. Cleaning costs for work clothing

Some professions require special work clothing that must be cleaned regularly and properly maintained. No receipts are required for cleaning costs. Expenses may be estimated based on valid cost guidelines. The costs for washing, drying, and ironing may be entered. The estimate is based on the size of the household and the selected wash or dry cycle.

Example
: For a single-person household, a wash cycle at 60 degrees is estimated at 76 cents. The use of a condenser dryer would then be estimated at an additional 55 cents. Ironing adds another 7 cents.

What may initially sound somewhat complex and confusing can be quickly estimated using an appropriate table. Ideally, you should contact a qualified tax advisor for this. Regarding cleaning costs, the Federal Fiscal Court has even upheld the practice of not objecting to claims without receipts in a ruling.

Tax Consulting in Düsseldorf and Oberhausen

We hope you enjoyed this post and now understand how the non-objection limits are regulated. For taxpayers who do not deal extensively with the numerous tax regulations, it is often difficult to take all relevant aspects into account in their tax return. As a result, mistakes can easily occur, or useful opportunities—such as the non-objection limit—may be overlooked. To ensure this doesn’t happen to you, you should rely on a qualified tax advisor. With our offices in Düsseldorf and Oberhausen, we are the ideal partner for your tax matters. Contact us to schedule an initial consultation. We look forward to meeting you.