Tax deductible costs for legal expenses insurance
You cannot fully deduct the costs of your legal protection insurance against tax. An exception is the share for labor law protection.
In general, legal expenses insurance is not considered tax deductible. The only exceptions are in labor law. If you have legal protection insurance for the area of employment, you can claim this for tax purposes.
Legal protection insurance costs
Legal protection insurance is used to cover you if you seek legal proceedings or contact a lawyer. The policy takes over costs and services for lawyers and litigation up to an upper limit specified in the contract - the sum insured. Mediation, i.e. an agreement without a court, can also be insured. Depending on the amount of your deductible, the annual contributions vary between 150 and 300 euros if you cover the areas of transport, labor law and private law. Here you will find an overview of the costs for legal protection insurance from four well-known providers (as of 2015).
| Without excess | With a deductible of 150 euros | |
| DEURAG | 328 EUR per year | 236 EUR per year |
| DEVK | 306 EUR per year | 236 EUR per year |
| THE | EUR 343 per year | 287 EUR per year |
| KS AUXILIA | 346 EUR per year | 233 EUR per year |
Deduct professional costs
You can deduct business-related costs from tax. These are considered special expenses: For example, social security contributions or income-related expenses: costs related to work. For employees, claiming such expenses is a good way to reduce the tax burden.
You cannot fully deduct the contributions of your legal expenses insurance in one of the two areas. Many legal protection contracts cover several areas. Often a protection for disputes in the private sector, a insurance for traffic legal protection and an industrial legal protection insurance for the legal dispute with the employer on the contract components. If you have a contract that includes labor legal protection insurance, you can deduct the costs for this module from tax. In this case, the contributions to the insurance are professional.
If you only have labor legal protection insurance, state the contributions for this in your tax return. With a combined legal protection insurance, you calculate the amount that is due for labor legal protection and apply it. The fact that you can deduct the costs for labor law is an exception. You cannot state the costs of securing other areas of law because they are not caused by work.
Strictly speaking, you can include private legal protection insurance in your tax return ...
Claim contributions to legal expenses insurance
If you want to deduct your professional legal expenses insurance from tax, you need to know the exact amount. If your legal protection insurance only includes labor legal protection, this amount is already available to you. If you have combined legal protection insurance, you need to find out the proportion for labor legal protection. You can find this information in your insurance documents. Alternatively, you can call your insurance company and ask for a list to be sent to you or write to the insurance company.
The sample letter can look like this: "My legal protection insurance with the contract number... covers the area of labor law. Since I would like to claim the pro rata insurance premiums as income-related expenses for tax purposes, I would ask you to send me a To send a written confirmation of what proportion according to the damage statistics to the area of labor law protection not applicable. "
- In this case, write to your insurance company and have them issue a confirmation of the costs, which only concern labor law protection.
- Use Appendix N of the tax return.
- You enter the costs for your legal protection insurance - the share of labor legal protection - in your income tax return under "income-related expenses".
