Discount allowance - Applicable to intra-group sales, too

The tax court of Lower Saxony, in its ruling of 10.12.2025 (case reference: 3 K 78/25) decided that the discount allowance under Section 8(3) sentence 2 of the Income Tax Act (Einkommenssteuergesetz, EStG) may also be applied when the employer does not sell goods on its own behalf, but rather for the account of another group company. The starting point for the decision was the legal provision under Section 8(3) EStG, according to which non-cash benefits from staff discounts may remain tax-exempt provided that they are granted by the employer and relate to goods or services that the employer does not mostly obtain for the needs of its own personnel. In the case in question, the members of staff received discounted goods via their employer company, which was however acting on behalf of and for the account of an affiliated company.

The local tax office refused to grant the tax-exempt allowance on the grounds that the employer had not provided the goods itself. The tax court did not agree with this. In the opinion of the court, the term ‘selling’ has to be broadly interpreted and also covers situations where the employer is involved in the sales process without acting as a seller under civil law. The crucial factor was that the employer made the product available on the market and was functionally integrated into the sales process. This has made it clear that in order for the discount allowance to apply it would not be absolutely essential for the employer to act on its own behalf and for its own account. In fact, acting as an agent or sales representative may also be sufficient, provided that the benefits arise from the employment relationship and the employer plays an active role in sales.

This ruling has expanded the possible uses of the discount allowance, particularly for group structures based on the division of labour. An appeal against this ruling has been lodged and a final clarification by the Federal Fiscal Court is still outstanding.