Bahncard for business travel: When employers can cover the costs tax-free

Business travel is part of everyday working life for many employees. Whilst flat-rate mileage allowances are often reimbursed tax-free for journeys made in a private car, a different rule applies when using trains and other forms of public transport: in such cases, only the actual costs incurred – such as the cost of a train ticket – can be reimbursed tax-free. A tax-free flat-rate reimbursement is not possible.

One interesting alternative may be for an employer to provide a Bahncard. This is particularly worthwhile if you regularly travel by train on business. There are two options here: either the Bahncard is used exclusively for business travel, or it is also authorised for private travel.

If the BahnCard is used exclusively for business travel, the tax treatment is generally unproblematic.

In practice, however, private use is often permitted. In such cases, it depends on whether the purchase is ‘worth it’ for the employer.

In other words: if the savings made by purchasing discounted tickets for business travel exceed the cost of the BahnCard, there is always an overriding business interest. The cost of a BahnCard is tax-deductible.

For example: if a Bahncard 50 costs around 244 euros a year and the employee saves more than this amount in total through regular business travel, this constitutes a predominantly business-related interest. As a result, the Bahncard can continue to be provided tax-free – even if it is also used for private purposes.

It is important, however, that this assessment is made at the outset. Employers should therefore work out in advance whether the Bahncard is likely to pay for itself. The Deutsche Bahn’s forecast tool for the Bahncard 100 can be used for this purpose. https://bcbp.db-app.de/prognose/

Even if actual usage later turns out to be different from what was planned, the original decision remains in force. As a rule, no retrospective taxation takes place.

Tip for tax audits: During tax audits, the tax authorities place particular emphasis on a clear and verifiable distinction between business and private use. Employers should provide a clear forecast of expected usage in advance and keep comprehensive records of actual business journeys, travel expense claims and any reimbursements. Any discrepancies between the forecast and actual usage should also be documented. This will enable you to create robust documentation, reduce the risk of adjustments during a tax audit and avoid having to pay back taxes.