New tax-free purchasing power supplements from 01.07.2021

The employer can compensate for the higher local cost of living of an employee posted abroad by paying a purchasing power allowance. The tax-exempt amounts according to §3 No. 64 S. 3 EStG (the german Income Tax Act) have been adjusted as of 01.07.2021.

The data can be found in the BMF letter dated 02.07.2021. (Ref. IV C 5 – S 2341/21/10001 :002; DOK: 2021/0767405)

Click here for the document:

https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Lohnsteuer/2021-07-02-kaufkraftzuschlaege-stand-01-07-2021.html