Questions & Answers
Answers to common questions.
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656 questions · Page 13 / 14
How are tips paid to business owners treated for tax purposes?
Tips paid to business owners (e.g. sole proprietors, principals) always constitute taxable business income. A recording obligation applies without exception and must be fulfilled depending on the cash register system in use. The tax exemption under § 3 Nr. 51 EStG applies exclusively to employees.
As of: May 2021
How are accommodation costs treated for tax purposes in cases of a second household abroad?
The assessment is made on a case-by-case basis. The decisive factor is the actually necessary accommodation costs, taking into account the housing conditions in the respective country of employment. A flat-rate floor space limit, as applied domestically, does not apply.
As of: November 2023
How are the costs for accompanying persons at company events treated?
If an employee brings along an accompanying person, the proportionate costs for that person are attributed to the employee. This may cause the EUR 110 tax-free allowance to be exceeded more quickly, with the excess portion being taxable as employment income.
As of: December 2019
How are the different types of tenant fixtures depreciated for tax purposes?
Sham components (Scheinbestandteile) and operating equipment (Betriebsvorrichtungen) are treated as movable assets and depreciated over the lease term or their standard useful life pursuant to § 7 Abs. 1 and 2 EStG. Tenant fixtures held in beneficial ownership, as well as those providing a specific operational benefit, are generally classified as immovable assets and depreciated over the useful life of the building or pursuant to § 7 Abs. 5a EStG.
As of: July 2023
How are refunded health and long-term care insurance contributions treated for tax purposes?
Under § 10 Abs. 4b Satz 2 EStG, contribution refunds must first be offset against expenses of the same type paid in the year of the refund. If a refund surplus remains for contributions under § 10 Abs. 1 Nr. 3 and 4 EStG, it is added to the total amount of income pursuant to § 10 Abs. 4b Satz 3 EStG. The reason for the refund is irrelevant.
As of: August 2023
How are multiple business trips on the same day treated for the per diem meal allowance?
If several business trips take place on the same calendar day, the individual periods of absence are added together. The €14 per diem is granted if the combined absence exceeds the 8-hour threshold.
As of: July 2022
How is insolvency benefit (Insolvenzgeld) treated for tax purposes?
Insolvenzgeld is exempt from income tax under § 3 No. 2 lit. b EStG. However, it is subject to the progression clause (Progressionsvorbehalt) pursuant to § 32b Abs. 1 Nr. 1 lit. a EStG and therefore increases the tax rate applied to the remaining income. It is paid as a one-time benefit by the Bundesagentur für Arbeit (Federal Employment Agency).
As of: September 2022
How is the civil servant death benefit calculated?
The civil servant death benefit is based on the deceased official's monthly gross salary or pension payments. Surviving dependents receive twice the monthly gross salary or pension. It is intended to cover special expenses arising after death, such as funeral costs.
As of: September 2021
How is the age relief amount (Altersentlastungsbetrag) calculated for spouses under joint assessment?
Under joint assessment, the Altersentlastungsbetrag is determined separately for each spouse. Each spouse must individually meet the personal requirements, in particular the age threshold. Any unused amount cannot be transferred to the other spouse.
As of: February 2022
How is the application for Q4 2021 submitted?
Companies that have already applied for Überbrückungshilfe III Plus for July to September 2021 can submit an amendment application for Q4. Companies without a prior application can file an initial application and will receive subsidies for the full funding period from July to December 2021.
As of: October 2021
How is the term 'occasionally' interpreted within the meaning of Section 24 (2) KSVG?
According to case law, 'occasionally' means 'sometimes', 'here and there' or 'from time to time'. A one-time commission does not meet this definition and therefore does not trigger any liability to pay the artists' social security contribution. Exceeding the EUR 450 threshold is of secondary importance in this context.
As of: August 2022
How exactly is the equity subsidy calculated?
The percentage rate of the equity subsidy is multiplied by the monthly Überbrückungshilfe III (Bridging Aid III). Example: With bridging aid of EUR 6,000 per month and a surcharge rate of 35 percent (four months with revenue declines exceeding 50 percent), the equity subsidy amounts to EUR 2,100.
As of: April 2021
How do I apply for or claim the relief amount for single parents (Entlastungsbetrag für Alleinerziehende)?
For employees, the basic amount is automatically applied through wage tax class II (Lohnsteuerklasse II). The increased amount of EUR 240 per additional child requires a separate application to the tax office (Finanzamt). Self-employed individuals and business owners claim the relief amount in the 'Anlage Kind' annex to their income tax return.
As of: February 2023
How is the relevant degree of disability determined for the tax year?
The degree of disability (Grad der Behinderung, GdB) is determined at the beginning of the calendar year by a medical assessment and applies for the entire year. Even if the GdB changes during the year based on a new assessment, the value established at the start of the year remains decisive for the amount of the lump-sum allowance.
As of: November 2021
How is the tax-free portion of the pension calculated?
The tax-free portion is the difference between the full annual pension amount and the taxable share determined by the table in § 22 Nr. 1 S. 3 a) aa) EStG. The calculation is performed in the calendar year following the start of the pension (§ 22 Nr. 1 S. 4 f. EStG). The resulting tax-free allowance generally remains unchanged for subsequent years.
As of: April 2023
How is the 100 kW (peak) threshold tested per taxpayer?
The test is two-tiered: first on a property-related basis, checking whether the building-related capacity limits are met, then on a person-related basis, checking whether the 100 kW (peak) threshold per taxpayer is observed. Only systems that already fall within the scope of § 3 Nr. 72 EStG are included in the 100 kW threshold; ground-mounted systems and systems exceeding the property-related limits are not counted. The 100 kW threshold is an absolute exemption limit: if it is exceeded, the tax exemption is lost for all systems.
As of: August 2023
How is the 6-year holding period treated in a partially gratuitous business transfer?
Under the unified theory (Einheitstheorie) of the BFH, the following applies: If the partial consideration does not exceed the book value, the transaction is treated as a gratuitous transfer under § 6 Abs. 3 EStG, and the holding period is carried over. If the partial consideration exceeds the book value but remains below the fair market value (gemeiner Wert), hidden reserves are partially realized; the treatment of the prior holding period is disputed.
As of: August 2022
How is the assessment basis for the Altersentlastungsbetrag (old-age relief amount) determined?
The assessment basis comprises gross employment income plus the positive sum of other income (excluding § 19 EStG income and the income types excluded under § 24a sentence 2 nos. 1-5 EStG). Both components are calculated separately: employment income is taken into account in full even if the sum of other income is negative. Income-related expenses or the standard allowance under § 9a no. 1a EStG do not reduce the employment income.
As of: February 2022
How is the lump-sum business expense deduction calculated for midwives and childminders?
Self-employed midwives may deduct a flat rate of up to 25% of their business income as business expenses, capped at EUR 1,535 per year. Self-employed childminders providing full-time care (40 hours/week) may claim EUR 400 per month per child (as of April 2024).
As of: December 2023
How is the energy price allowance paid out to employees?
Employees in an active employment relationship on 01.09.2022 receive the 300 € from their employer together with their wages. The payment is reported on the income tax statement (Lohnsteuerbescheinigung) with the capital letter E. For organizational reasons, the payment may also be made later in 2022. If there was no active employment relationship on 01.09.2022, or in the case of short-term employees, the allowance is only granted via the 2022 income tax return.
As of: July 2022
How is the commuter allowance (Entfernungspauschale) calculated from 2021 onwards?
The first 20 kilometers of the one-way distance are calculated at 30 cents per working day, and 35 cents from the 21st kilometer onwards. Example: With a one-way distance of 30 km and 210 working days, the calculation is 20 km x 210 x €0.30 = €1,260 plus 10 km x 210 x €0.35 = €735, totaling €1,995.
As of: December 2020
How is the mobility premium calculated?
The basis of assessment is the increased commuter allowance from the 21st kilometer onwards (2021: €0.35/km; 2022: expected €0.38/km), multiplied by the kilometers exceeding this threshold and the number of working days. This product is compared with the difference between the basic tax-free allowance and the taxable income; the lower of the two values forms the basis of assessment. A premium of 14% (corresponding to the entry-level tax rate) is granted on this amount.
As of: March 2022
How do I claim the tax reduction for energy-efficient building renovations?
The relief is claimed through your income tax return by reporting the expenses for the energy-efficient measures to the Finanzamt (tax office). Required documents include a proper invoice from the specialist contractor and the official certificate from the contractor (Fachunternehmerbescheinigung). Payment must be made by non-cash means (e.g., bank transfer).
As of: April 2024
How does the tax office verify the tax-exempt status of a scholarship?
The review is initiated upon application by the scholarship recipient, either at the tax office responsible for the corporate income tax assessment of the scholarship provider or at the recipient's local tax office. The recipient receives a binding certificate confirming the taxable or tax-exempt status. A subsequent re-examination by the tax office is then precluded. However, this procedure is only available for domestic scholarship providers.
As of: July 2022
How is remuneration determined in childminding?
Remuneration can either be agreed privately with the parents or paid by public bodies (the municipality). With public funding, the public body sets the amount under § 23 SGB VIII. Parents contribute to the costs on a flat-rate, staggered basis pursuant to § 90 Abs. 1 Nr. 3 SGB VIII – depending on income, the number of children eligible for child benefit, and weekly care hours.
As of: July 2021
How is the W-IdNr. assigned?
The W-IdNr. is assigned by the Bundeszentralamt für Steuern (BZSt, Federal Central Tax Office) upon request of the competent tax authority. The tax authority transmits the required identification details to the BZSt. Multiple assignments of the same W-IdNr. are not permitted.
As of: September 2024
How is a leased asset's classification as deemed fixed assets assessed?
Since the asset is not owned by the company, the assessment is made under the fiction that the company were the owner. The decisive factor is the actual operational use, in particular whether the asset permanently serves the business. Classification as fixed assets is especially likely where similar assets are repeatedly leased for ongoing use.
As of: July 2022
How is the appropriate amount of a tax-free scholarship determined?
According to the BFH ruling of 24 February 2015 (VIII R 43/12), the decisive factor is not the BAföG rates but the individual circumstances of the scholarship recipient. Relevant aspects include age, academic background, and typical living expenses. The salary earned immediately before the scholarship may also serve as a reference point.
As of: July 2022
How is the withheld construction withholding tax offset for the service provider?
The remitted construction withholding tax is offset on the service provider's side in a fixed order: first against the wage tax to be withheld, then against prepayments on income or corporate income tax, and finally against corresponding back payments. Any remaining amount that cannot be offset under § 226 AO is refunded to the service provider by the tax office.
As of: May 2023
How is a home office shared by spouses treated for tax purposes?
The requirements for a home office must be examined separately for each user. If both meet them, each spouse may deduct the expenses they have economically borne. For payments from a joint account, the respective debtor can claim the costs – for example, if the electricity bill is in the wife's name, she may deduct those expenses.
As of: September 2023
Wie wird eine Photovoltaikanlage einkommensteuerlich behandelt?
Kleine Photovoltaikanlagen sind einkommensteuerlich begünstigt. Die Infografik finden Sie im Merkblatt-Verzeichnis unter "Photovoltaikanlagen Einkommensteuer". (Quelle: Deubner Verlag)
How is December rent paid on 09.01. allocated for tax purposes?
Since rent qualifies as a recurring income item and the payment is made within the 10-day window after year-end, the exception to the cash-in/cash-out principle applies. A further requirement is that the rent was due in the prior year. The rental income is therefore allocated to the assessment period of its economic origin, i.e. the prior year (December).
As of: February 2022
How do depreciation deductions affect a speculative gain?
A speculative gain is increased by the depreciation (AfA) previously claimed. As a result, a taxable gain can arise even if the sale price merely equals the original acquisition costs. This effect is particularly important for rented properties sold within the ten-year speculation period.
As of: January 2021
How do employer subsidies affect the commuter allowance (Entfernungspauschale)?
Tax-free commuting subsidies from the employer reduce the deductible Entfernungspauschale. As work-related expenses (Werbungskosten), the employee can only claim the remaining amount after deducting the reimbursement.
As of: January 2022
How does the development status of the property affect real estate transfer tax?
If the property is already developed at the time the purchase contract is concluded, only the developed property can be the subject of the contract, and the development costs are subject to real estate transfer tax. If it is not yet developed, civil law standards must be applied to determine whether the developed property is the subject of the transfer obligation.
As of: December 2022
How does the progression clause affect wage replacement benefits?
Under § 32b Abs. 1 Nr. 1a EStG, wage replacement benefits are themselves tax-free but increase the tax rate applied to other taxable income. A fictitious taxable income including the wage replacement benefits is calculated, and the resulting average tax rate is then applied only to the regular taxable income. This regularly leads to additional tax payments.
As of: May 2021
How does the 3-year period affect income-related expenses already deducted?
All repair and modernisation expenses within the 3-year period are added together. If the 15% threshold is only exceeded due to later measures, amounts previously deducted as income-related expenses must be reclassified retroactively and allocated via the building depreciation. This can result in amended tax assessments.
As of: June 2023
How does the Energiepreispauschale (energy price lump sum) affect business and professional income?
For taxpayers earning exclusively profit-based income under § 13, § 15 or § 18 EStG, the Energiepreispauschale reduces the income tax prepayment for Q3 2022 (due 10 September 2022). If the prepayment is less than €300, it is reduced to €0, and the remaining amount is offset or paid out as part of the 2022 income tax assessment.
As of: July 2022
How does the amount of the capital gain affect the tax allowance?
The allowance generally amounts to EUR 45,000, but is reduced by the amount by which the capital gain exceeds EUR 136,000. With a capital gain of EUR 125,000, the allowance is therefore available in full, provided the personal requirements are met.
As of: November 2022
How does the day-by-day rental of individual rooms affect the tax exemption when selling a home?
According to the BFH ruling of 19.07.2022 (IX R 20/21), the day-by-day rental of individual rooms to third parties excludes those rooms from being used for personal residential purposes. The capital gain must therefore be allocated: the portion attributable to the rented rooms is taxable as other income, while the remaining owner-occupied area remains tax-free.
As of: July 2023
How does a gratuitous transfer of a business affect the 6-year holding period?
In gratuitous transfers such as inheritance, anticipated succession, or gift, the predecessor's holding period is credited to the legal successor. In the case of inheritance (universal succession), this happens automatically. For individual succession, the prerequisite is that the legal successor continues the book values; if the fair market value is applied, the hidden reserves are disclosed and the § 6b claim ceases to apply.
As of: August 2022
How does anticipated succession affect the calculation of capital gains?
In the case of a gratuitous acquisition, pursuant to § 23 Abs. 1 S. 3 EStG, the acquisition or transfer into private assets by the predecessor is attributed to the individual legal successor. The heir or donee therefore steps into the tax position of the transferor. Accordingly, the predecessor's withdrawal date and withdrawal value are decisive.
As of: July 2022
How do shareholders' income types change after exercising the option?
Co-entrepreneurs become shareholders of the opting corporation. Special remuneration is then treated as wage-tax liable employment income, loan interest and profit distributions are subject to capital gains tax as investment income (§ 20 EStG), and the provision of assets to the company may result in rental and leasing income (§ 21 EStG).
As of: July 2021
How do the investment deduction allowances change under the 2020 Annual Tax Act?
The investment deduction allowance (Investitionsabzugsbetrag) is increased from 40% to 50% of the expected acquisition or production costs. In addition, a uniform profit threshold of EUR 200,000 now applies as a prerequisite across all categories of income. The new rules apply for the first time to investment deduction allowances and special depreciation in fiscal years ending after 31 December 2019.
As of: January 2021
How is the total useful life for residential properties changing under the Bewertungsgesetz?
The total useful life is being increased from 70 to 80 years for certain types of buildings. This applies to single- and two-family homes, rental residential properties, apartment buildings, condominium ownership, as well as mixed-use properties and residential buildings with mixed use. The longer useful life increases the assessed value.
As of: November 2022
Is the relief amount for single parents granted in full if the requirements cease to apply during the year?
No, the relief amount is granted only on a pro rata basis. For each full calendar month in which the requirements of § 24b Abs. 1 EStG are not met, the amount is reduced by one twelfth. In addition, only one of the two parents can claim the relief amount.
As of: December 2021
Does the 6-year holding period continue in the case of a fully paid business acquisition?
No. In a fully paid business sale, the hidden reserves of the fixed assets are realized, and the prior holding period of the seller is not transferred to the buyer. The buyer must hold the assets in their business for at least 6 years again in order to claim the § 6b EStG benefit.
As of: August 2022
Is a contractual purchase price allocation between real estate and furniture recognized for tax purposes?
A purchase price allocation made in the contract is generally also binding for tax purposes, provided it is not a sham transaction or an abusive arrangement. Problems mainly arise when the allocation reflects an increase in value of the furnishings, since furniture typically depreciates. The seller should be able to plausibly demonstrate why the allocation is economically justified.
As of: January 2021
Is a separate final statement prepared for each funding program?
Yes. Although the statements are submitted as a package, the review body issues a separate final statement for each funding program within a package. The package solution is used solely for joint recording and processing.
As of: May 2022
Does a delayed commissioning of a PV system affect the feed-in tariff?
No, the otherwise customary monthly degression of the feed-in tariff is suspended until early 2024. As a result, the new tariff rates remain stable until the end of 2023, ensuring that global supply shortages and related delays in system construction do not lead to a reduced tariff.
As of: September 2022