Daily allowances for permanent employment on the company's premises

Daily and overnight allowances paid by employers for field work, driving, construction and assembly work outside the employer's premises, temporary employment under the Austrian Temporary Employment Act (Arbeitskräfteüberlassungsgesetz - AÜG) and temporary work at a place of employment in another political municipality are tax-free up to certain limits.

In the course of a joint audit of payroll taxes and contributions (GPLB) at a limited partnership, it was discovered that tax-free travel expenses had been paid to employees who had been sent to external companies of clients, in some cases from the first day of employment and in other cases over months or even years. The employees carried out assembly, installation, repair and maintenance work on behalf of the limited partnership. The tax office took the view that these employees were not entitled to tax-free reimbursement of travel expenses and issued the limited partnership concerned with wage tax assessment notices.

Legal opinion of the Federal Tax Court (BFG)

In the opinion of the Federal Tax Court (BFG), there was no "construction site and assembly work outside the employer's premises" in the present case. As the employees' permanent place of work is on the premises of the limited partnership's customers, it cannot be assumed that they are travelling ("business trips"). Nor can it be assumed that there is a "temporary activity at a place of employment in another political municipality". The term "temporary" is not to be interpreted schematically according to a certain measure of time, but functionally.
The limitation by the word "temporary" is necessary in order to avoid an excessive application of the exemption provision, as otherwise any activity "at a place of employment in another political municipality" would lead to the applicability of the exemption provision, whereas for the other facts of the case, factual and/or temporal limitations are inherent in the matter and therefore do not need to be explicitly mentioned. Against this background, the opposite conclusion drawn by the limited partnership is inadmissible.

Tip: If employees are permanently (over many months or years) employed in the business premises of their own employer's customers, they cannot be paid tax-free daily allowances for this. However, (additional) expenses incurred by employees for professional reasons (e.g. double household) can be claimed as income-related expenses in the employee's tax assessment.