France: Government clarifies the Tax Regime of Professional Expenses linked to Telework
The Ministry of the Economy announced in a press release that allowances paid by employers to cover expenses related to employees’ work at home (allowances, lump-sum reimbursements, reimbursement of actual expenses) will continue to be exempt from income tax, although employers will have to identify these allowances in the information submitted to the tax administration. The amount of taxable income pre-filled on the tax return should not, in principle, include such allowances.
Employees will be able to check this when they declare their income in 2020, by checking the pre-filled amounts against their pay slips (or the annual tax certificate issued by their employer), according to the Ministry of the Economy and the Ministry of Public Accounts.
The ministry added that the lump sum allowances are tax-free up to a limit of 2.5 euros per day of home-based teleworking, i.e. 50 euros per month for 20 days of teleworking, with a ceiling of 550 euros per year. This tolerance applies “if the allowance covers exclusively professional expenses incurred in the course of home teleworking, which excludes ordinary expenses generally required for the exercise of the profession, which include in particular travel expenses between home and the workplace and catering expenses.”
These amounts will also be those that employees working at home will be able to deduct if they opt for the deduction of professional expenses for their real and justified amount, “the taxpayer retaining the possibility of deducting them for their exact amount if this is more favourable”.
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