Internet & Phone Costs: How to Deduct Them From Taxes

Do you use your private smartphone for business calls? Do you write work e-mails from home after office hours? If so, your internet and telephone costs are not exclusively private and are tax-deductible. Keep reading to know more.

    01.

    Which costs are tax-deductible?

    The tax office recognises the costs for smartphone use and the internet connection. Also, it recognises basic call tariffs or flat rates. You can also specify the acquisition costs for the devices themselves. This even extends to necessary repair costs.

    Since 2018 the costs of a smartphone or other related work equipment are tax-deductible at 800 Euros net or 952 Euros including VAT. If the purchase amount is higher, you have to write off the purchase over several years.

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    02.

    Two Ways to Deduct Telephone and Internet Costs From Taxes

    Let’s look at two ways of deducting telecommunications costs from your tax return:

    1. As an employee, you can claim 20 percent of your personal phone bill as income-related expenses (Werbungskosten), and enter up to 20 Euros per month. However, this upper limit does not include one-off expenses such as repairs or purchases.
    2. Another option is to provide evidence of the internet and telephone costs incurred. In this case, you’ll need to investigate exactly what percentage of your smartphone and internet use have been for professional purposes and private use.

    Once you have worked out what percentage of your devices you’ve been using for work, you’ll need evidence to back your claims.

    An example: If you declare 50 per cent of your device usage as work-related, you should be able to prove this proportion with the invoices for the last three months.

    One advantage of this approach is that there is no upper limit. You can deduct 50 per cent of all bills, including the purchase or repair costs.

    Good to know

    Once the tax office approves the receipts, you can receive the tax returns on them for the subsequent following years.

    03.

    Regulation for the Self-Employed

    A similar rule applies to the self-employed: telephone costs can be declared as business expenses if at least 10 per cent of the usage is work-based. Here, too, you must segregate private and professional conversations. This is easiest if you have separate connections and billing. Otherwise, as with employees, your assessment applies. Your claim must be supported with the connection records for three months.

    If you use your devices for more than 90 per cent of the time for work, the operational costs are fully deductible. For example, if you have two phone numbers but only one connection, you still have to provide evidence for professional use, otherwise, the tax office always assumes a 50-50 ratio.

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