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Created on Friday, 07 November 2008 23:57

Last Updated on Friday, 28 December 2012 18:52

Payment of Fines by Employers as Taxable Income for Driving Employees

Any of you who own cars are surely familiar with the situation: Arriving at your destination, you start searching for a parking space? Wait a minute. Have they not recently been added to some kind of red list? It is therefore no wonder that people disregard parking signs. Want to deduct parking fines from your taxes? You, as an employed driver, may not deduct the cost of parking tickets received while carrying out a task for your employer. But what about him? Supposing your employer is kind enough to pay your parking tickets, you are probably wondering whether this will be considered taxable income. The BFH answered this question on July 7, 2004 (re VI R 29/00).

The court had to decide a case involving a parcel agency. In order to meet the short delivery deadlines, the company drivers were ordered to park as close as possible to the customer. Parking restrictions were to be ignored. Whenever the drivers were fined the employer took care of these costs. The tax office and tax court construed these payments as income and wanted to tax them. The Federal Tax Court overruled them, arguing that these reimbursements were paid predominantly for business and not for remuneration purposes. The court considered it negligible that the employers could not deduct these fines.




Published on the old CMS: 2007/2/16
Read on the old CMS till November 2008: 58 reads