Corporate fitness and prevention courses: new requirements for proving tax exemption

Corporate fitness and prevention courses: new requirements for proving tax exemption

The range of services offered to employers by providers of corporate fitness programmes often includes not only typical sports offerings but also the option for employees to participate in online prevention courses. As employer-provided health promotion benefits, these prevention courses may be exempt from wage tax under section 3 no. 34 of the German Income Tax Act, provided the relevant conditions are met.

But in practice, detailed records of which employees attended which courses are often not kept. Certificates of attendance are also often not issued.

By decree dated 4 March 2026, the Bavarian State Tax Office specified the requirements for keeping evidence of prevention benefits in the payroll account. According to this decree, employer benefits may only be treated as tax-free within the meaning of section 3 no. 34 of the German Income Tax Act where reliable individual proof of participation is available, generally in the form of a certificate of attendance.

A monthly summary of signed-up employees that does not include proof of actual attendance will no longer be sufficient as proof for payroll tax purposes.

This change also reflects the current meaning reflected in the revised guidance on prevention issued by the association of the statutory health insurance funds [GKV-Spitzenverband],  which wants to see that the qualitative requirements of prevention are defined and regular attendance is documented.

In practice, employers have often obtained wage tax rulings within the meaning of section 42e of the German Income Tax Act in order to treat part of the expenses for corporate fitness programmes as tax-free, insofar as they relate to tax-privileged prevention offerings.

Going forward, such wage tax rulings should be revoked if certificates of attendance cannot be provided. Employers should, however, be given an opportunity to adjust their payroll tax treatment while relying on the rulings previously issued.

It is recommended to clarify early with the course providers whether they will be able to provide certificates of attendance in future.

Non-certified employer prevention courses

Under strict conditions, employers may also offer their employees non-certified prevention courses tax-free under section 3 no. 34. This particularly applies to courses that are carried out exclusively for an employer for its employees.

These cannot typically be certified by the statutory health insurance funds because only prevention courses as defined by section 20 of Book Five of the Social Code [Sozialgesetzbuch–SGB V] are certified. 

Non-certified courses carried out by the employer may nevertheless qualify for tax exemption if they meet certain conditions. This is particularly the case where:

• the course is a component of a structured health promotion process or
• the requirements concerning its quality, targeted nature and defined purpose are fulfilled.

The course must also be exclusively run for the employer’s employees and may not exist as a regular parallel course offered by the statutory health insurance funds.

A certified course plan can be referenced as proof of this, for example. The course instructor must confirm in these cases: 

• which plan is being followed and
• that it is being carried out according to the rules. 

The instructor’s qualification should also be clearly documented. These details are to be attached to the employee’s payroll record and made available in a tax audit.

Practical note:

Non-certified prevention courses are not excluded from tax exemption as such. The decisive factor is that the substantive and participant-related requirements are documented completely and in a reliable manner.

According to the current administrative position, for example the guidance issued by the State Tax Office of Rhineland-Palatinate dated 10 March 2026, reliable proof of actual participation is also required in these cases. In practice, this will generally mean an individual confirmation or certificate of attendance.

Recommended action

Companies now have an increased need for action with regard to documenting prevention courses within corporate fitness programmes.

Considering that other federal states may potentially also adopt this position, companies should:

• check and adjust their documentation processes
• systematically require and archive certificates of attendance
• examine existing binding rulings and 
• assess tax risks before a wage tax audit.

We would be pleased to support you in analysing your existing arrangements and in developing and implementing legally compliant solutions.

Our tool for classifying corporate fitness programmes for tax purposes supports you with practical implementation:
Evaluating corporate fitness programmes properly for wage tax 

Draft bill for the Annual Tax Act 2026

In the draft bill for the Annual Tax Act 2026, the Federal Ministry of Finance intends to include section 20c of Book V of the German Social Code in the reference contained in section 3 no. 34 of the German Income Tax Act.

From a systematic standpoint, an expansion of this kind does not appear to be absolutely necessary to the extent that activities to prevent work-related health risks predominantly serve the employer’s own business interests. In these cases, they already do not constitute taxable employment income by their nature.

This planned addition could lead to uncertainties in classifying courses in practice and give the impression that such activities should in any case initially be classified as employment income and only then be exempted from tax through section 3 no. 34. It is therefore still necessary to check them on a case-by-case basis.

We’ll keep you informed on how the legislative process develops.