Per diems tax free?
Over here in Germany we have a very strict tax code. It severely limits the amount of expenses that can be reimbursed tax free. While not too bad for certain places abroad, especially within Germany it's quite laughable.
You can claim 6,- Euros if away from base for more than 8 hours, 12,- Euros for more than 14 hours and 24,- Euros for an overnight. These amounts may be doubled and still remain tax free for the employee, although the employer has to pay a flat tax of 25% for the amount above the original rates.
After flying from Hamburg to Munich for an overnight a crew member could get 48,- Euros tax free with a total burden of 54,- for the employer. These amounts are for food and beverages only. Hotels can be reimbursed at full cost by the employer. For a dinner in Munich 48,- Euros is sufficient, but how about sitting in an FBO after a short flight for 5 hours without being able to claim anything tax free?
All per diems above the tax free allowances will increase your taxable salary. In Germany this means that they will not only be subject to income taxes, but also to all kinds of insurances which are deducted from your paycheck automatically. On top of that, a higher total income increases the tax rate. These total deductions easily approach or exceed 50%!!!
I would like to know how this is handled in different countries, both from an employees and an employers perspective. Could you get an unlimited amount of per diems without those being taxable?
For operators in Germany, do you have a special arrangement with tax authorities? Every human being with a brain can comprehend that an allowance of "nothing" or even 6,- or 12,- will not let you survive a day on a German airport!