Arbeitszimmer: BFH verschärft die Aufzeichnungspflicht

You have a home office room, dutifully collect every receipt, and enter the costs once a year in your tax return? That is no longer enough. In its judgment of 24 March 2026 (case no. VIII R 6/24), Germany's Federal Fiscal Court (BFH) ruled that the recording obligation under Section 4 (7) of the Income Tax Act (EStG) is only met if you record every single home office expense separately and promptly. Anyone who fails to do so loses the business expense deduction entirely – even if the costs are undisputed.

What the case was about

The claimant was a self-employed professional who determined his profit using a cash-basis income statement under Section 4 (3) EStG. His study in the attic of his own home was undisputedly the centre of his entire business activity – so in principle the costs would have been fully deductible as business expenses.

The dispute originally concerned how to allocate the building costs. Then the Hesse Tax Court (judgment of 13 October 2022, case no. 10 K 1672/19) asked to see the records – and the claimant produced a list he had compiled while preparing his tax return from the receipts collected over the year. That satisfied neither the tax court nor the BFH. The appeal was dismissed as unfounded.

The court never even reached the actual point of dispute – whether the floor space is allocated under DIN 277 or under the German Living Space Ordinance. The deduction already failed one step earlier, at the records.

What Section 4 (7) EStG actually requires

The provision is old but was rarely noticed. It requires certain expenses – including those for a home office under Section 4 (5) sentence 1 no. 6b EStG – to be recorded individually and separately from other business expenses. And Section 4 (7) sentence 2 EStG makes it clear: without this separate record, the costs may not be taken into account when determining profit.

This is not a formality that can be cured later. The BFH expressly emphasises that Section 4 (7) sentence 2 EStG creates an additional substantive requirement for the business expense deduction. No record, no deduction – full stop.

The key holding in plain language

According to the judgment, the recording obligation is only satisfied, in terms of both content and timing, if all expenses for the home office and its furnishings are recorded

• individually – not as an annual total, but item by item,
• promptly – not only when the tax return is prepared,
• in a separate column of the expense records (cash-basis accounting) or on a separate account in the books (accrual accounting),
• or at least bundled in a separate written or digital document.

A mere collection of receipts is expressly not sufficient – even though an orderly filing of receipts would otherwise be permissible under Section 146 (5) of the Fiscal Code.

How prompt is "prompt"?

The BFH refers to its earlier case law: records under Section 4 (7) EStG must generally be made within ten days and may exceptionally be postponed by no more than one month. In the case at hand, considerably more time passed between the annual gas and water statement (March) and the record (end of May) – that was too late.

No de minimis threshold – not even for small amounts

A common misconception: "the tax office won't be petty about a 40-euro share of an insurance premium." It will. The BFH applies its case law on gifts and business entertainment (Section 4 (5) sentence 1 nos. 1 and 2 EStG) to the home office without modification: the special recording obligations cannot be waived even in so-called de minimis cases.

The reasoning is systematic. By its location, function and furnishings, a home office is embedded in the private sphere. Precisely for that reason, a clear and continuously verifiable line between business and private use is needed – just as with entertainment expenses.

Which simplifications remain

The obligation is not entirely impractical. The tax administration allows simplifications in its circular of 15 August 2023 (BStBl I 2023, 1551), which the BFH cites in the judgment:

Type of cost	Recording
Financing costs (loan interest)	may be estimated during the year, final record once the bank's annual statement is available
Consumption-based costs (electricity, heating, water)	accordingly, based on the annual statement
Depreciation	once a year, promptly after the end of the business or calendar year
All other costs (e.g. servicing, insurance, repairs, furnishings)	individually and promptly, no simplification

Important: "promptly after the end of the year" does not mean "sometime in May when doing the tax return". In the case decided, that is exactly why the simplification did not apply either. And for items such as heating servicing, building insurance or a shutter repair, the simplification does not apply at all – they must be recorded on an ongoing basis.

Why the EÜR form is not enough

The claimant had entered his home office costs in the cash-basis income statement form. The BFH finds that the form only provides for depreciation to be shown separately and otherwise asks for a single total. That is not an individual record within the meaning of Section 4 (7) EStG.

Put differently: the form is the result of your records, not the record itself. It cannot replace ongoing bookkeeping.

What you should do now

1. Set up a dedicated account or column. With accrual accounting, a separate "home office" account; with cash-basis accounting, a separate column or category in your bookkeeping software. Do not bury it in "other business expenses".
2. Record every item individually. Date, amount, type of expense and, where relevant, the percentage applied. One line per receipt.
3. Post within ten days. Monthly bookkeeping is on the safe side; catching up once a quarter falls outside what the BFH accepts as prompt.
4. Add annual figures immediately. Utility statements, interest statements and depreciation belong in the record as soon as they are available – not only in the tax return.
5. Check for completeness. In the case decided, the list was missing precisely the proportionate depreciation amounts. That alone would have killed the deduction.
6. Review open years. If you currently have a tax audit or an objection procedure involving home office costs, this is highly relevant right now – the tax offices know this judgment.

Tip: The daily home office allowance works differently. It is a flat deduction without individual proof of room costs and has nothing to do with the recording obligation for actual home office expenses. You will find more on this in our article on the home office allowance 2026.

Constitutional concerns? Dismissed

The claimant argued that Section 4 (7) EStG was unconstitutional because the rule entered the law in 1996 via the mediation committee. The BFH refers to the Federal Constitutional Court (judgment of 7 December 1999, 2 BvR 301/98): the mediation committee did not exceed its limits at the time. The Senate has no doubts as to the constitutionality of the provision. So there is nothing to gain along that route.

We set up the records for you

The good news: if your bookkeeping is done on an ongoing basis anyway, the requirement is almost automatically met. That is exactly what we do at Buchführungsheld – real bookkeepers post your receipts continuously, set up a dedicated account for the home office and add annual figures such as depreciation and utility statements straight away. At a fixed price, without timesheets. You just upload your receipts. If you'd like to see how that would work for you, book a free preliminary consultation.

Frequently asked questions

Does the judgment also apply to employees?

No. Section 4 (7) EStG concerns business income, i.e. self-employed persons, freelancers and traders. There is no such special recording obligation for employees claiming income-related expenses. You still have to substantiate your costs there, of course.

Is a spreadsheet sufficient as a record?

Yes, if it meets the requirements: a separate digital document solely for the home office costs, with individual items entered promptly. The BFH expressly names a separate written or digital document as an alternative to the separate column. A spreadsheet filled in retrospectively in one go is not enough.

What happens if the records are missing?

The business expense deduction is lost entirely – even if the expenses were actually incurred, business-related and undisputed in amount. In the case decided, the tax would even have had to be assessed higher; only the prohibition on worsening a taxpayer's position in court proceedings prevented that.

How quickly do I have to post for it to count as "prompt"?

The BFH names ten days as the standard deadline, with a postponement of at most one month acceptable in exceptional cases. If you post your receipts monthly, you meet the requirement. If you only sort them at year-end or when preparing the tax return, you do not.