Questions & Answers
Answers to common questions.
Curated from our articles on tax advisory, statutory audit and legal services — alphabetical, filtered by audience or topic.
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656 questions · Page 4 / 14
Are research grants received in connection with a Habilitation subject to tax?
Yes, according to the FG Münster, research grants awarded in connection with a Habilitation must be treated as taxable employment income. They constitute income from non-self-employed work, provided there is a connection to the professional activity. Tax exemption cannot be justified solely on the grounds that the funds are intended to honor the entire scholarly work.
As of: August 2022
Can a main job and a Minijob with the same employer be held simultaneously?
No. If an employee performs multiple jobs for the same natural person as employer, social security law treats them as a single employment relationship. A non-insurable marginal employment alongside a main job subject to social security contributions with the same employer is therefore not possible — even if the activities are clearly distinguishable in type, location and time.
As of: February 2023
Are waste collection costs tax-deductible under § 35a EStG?
No, waste disposal expenses are generally not deductible as household-related services under § 35a Abs. 2 EStG. The service is typically performed outside the household (collection, recycling, operation of the disposal service) rather than by household members. This was confirmed by the FG Münster, and the tax authorities also exclude waste fees from deduction in the catalogue list relating to § 35a EStG.
As of: January 2023
Are costs for the disability-accessible redesign of a garden deductible as extraordinary expenses?
In principle, expenses for the disability-accessible redesign of a garden incurred by a severely disabled taxpayer may be deductible as extraordinary expenses pursuant to § 33 EStG. The prerequisite is that the measures are necessary to enable use of the garden despite the physical impairment. In addition, the deduction requires that the reasonable burden threshold is exceeded.
As of: June 2022
Are the costs of initial vocational training deductible as income-related expenses?
No. Expenses for an initial vocational training or a first degree that also provides an initial qualification cannot be deducted as income-related expenses (Werbungskosten). They may only be claimed as special expenses (Sonderausgaben) up to a maximum amount of currently EUR 6,000 per year.
As of: February 2020
Are costs for a home emergency call system with an external call center eligible under § 35a EStG?
No. In its ruling of 15.02.2023 (VI R 7/21), the BFH decided that expenses for a home emergency call system which, in addition to providing the device, includes a 24-hour call service without an on-site responder, do not qualify for the tax reduction under § 35a Abs. 2 EStG. The reasoning: the essential part of the service is rendered in the external call center and thus outside the household.
As of: May 2023
Are rental income from land and buildings exempt from VAT?
Yes, pursuant to § 4 No. 12 sentence 1 lit. a UStG, income from the leasing and renting of land and buildings is generally exempt from VAT. This rule is based on Art. 135 (1) lit. l of the VAT Directive (MwStSystRL). An exception previously applied to co-leased operating equipment (Betriebsvorrichtungen), the consideration for which was subject to VAT.
As of: September 2023
Are tenant compensation payments during a renovation immediately deductible as income-related expenses?
Yes, according to the BFH ruling, compensation paid to tenants for early move-out to enable renovation works is immediately deductible as income-related expenses from rental income (§ 21 EStG). Such payments do not qualify as acquisition-related production costs under § 6 Abs. 1 Nr. 1a EStG, as they are only indirectly connected to the construction measures.
As of: April 2023
Are renovation costs incurred before business commencement deductible for trade tax purposes?
As a rule, costs for preparatory activities incurred before business commencement are not taken into account when determining trade income. This distinguishes trade tax from income tax, where preparatory expenses can reduce the tax burden. However, an exception may apply in lease cases pursuant to § 2 Abs. 5 GewStG.
As of: February 2022
Are scholarships from other EU countries tax-free in Germany?
Yes, scholarships from other EU countries are generally also tax-free, provided the requirements of § 3 Nr. 44 EStG are met and the foreign grantor complies with German non-profit law standards. The recipient must submit extensive documentation to their local tax office, including the grantor's statutes, areas of activity, and financial reports.
As of: July 2022
Are tips received by employees tax-free?
Yes, tips paid to employees are tax-free without limit under § 3 Nr. 51 EStG, provided they are paid voluntarily by a third party in connection with a service and in addition to the wages owed. Service charges that are fixed on the menu do not qualify and are taxable wages.
As of: May 2021
Are sales from a cafeteria in a retirement home exempt from VAT?
No, the BFH has ruled that sales from operating a cafeteria in a retirement home are subject to VAT. The exemption under § 4 Nr. 16 UStG does not apply, since cafeteria services are not closely linked to care and are not indispensable for the provision of care.
As of: November 2023
Are work-related expenses deductible during receipt of insolvency benefits?
Yes, work-related expenses such as commuting between home and the primary place of work remain deductible during receipt of insolvency benefits (Insolvenzgeld). § 3c Abs. 1 EStG does not preclude this, as there is no direct economic link between the expenses and the tax-exempt insolvency benefits. The expenses serve the performance of work, not the generation of the insolvency benefits.
As of: September 2022
Are bonus payments in a mini-job exempt from social security contributions?
Bonus payments in a mini-job are only exempt from social security contributions if they are also exempt from wage tax. In particular, bonuses for Sunday, holiday or night work must be paid in addition to the base wage and must comply with the limits set out in § 3b Abs. 1 Nr. 1-4 EStG. If these requirements are not met, social security contributions become mandatory.
As of: May 2022
Are bonuses subject to social security contributions during maternity leave or illness?
Yes. Because no actual work is performed during these periods, the continued bonus payments become taxable. Once the tax exemption no longer applies, the exemption from social security contributions generally ceases as well. For mini-jobs, this may cause the marginal earnings threshold to be exceeded, triggering mandatory contributions.
As of: May 2022
Are services covered by general membership fees also subject to VAT?
According to the ECJ and the BFH, services provided by a sports club to its members in return for general membership fees are, in principle, subject to VAT. However, it remains to be seen whether the tax authorities will fully adopt this view. Clubs should prepare for a corresponding change in practice.
As of: May 2022
Are the values agreed in the purchase contract for land and building always binding?
No. If the contractually agreed values deviate significantly from the actual market values, the tax authority may review the allocation and, if necessary, correct it by means of an expert appraisal. The decisive factors are then the real value ratios as of the date of transfer of risk.
As of: January 2023
Are separately remunerated services provided by sports clubs subject to VAT?
Yes, under the revised case law of the BFH, services provided by sports clubs for separate consideration are generally subject to VAT. Examples include the right to use sports facilities, the provision of sports equipment, or the sale of gear. Reliance on the VAT exemption under Art. 132 (1) (m) of the EU VAT Directive is no longer possible.
As of: May 2022
Must retroactive contribution refunds from social court proceedings be reported under § 10 Abs. 4b EStG?
Yes. In its ruling of 22 March 2023 (X R 27/21), the BFH held that contribution refunds resulting from a reversal or retroactive modification of the social insurance relationship are also subject to the offsetting and add-back mechanism of § 10 Abs. 4b EStG. The term "refunded expenses" is to be interpreted broadly; the legal basis of the refund is irrelevant.
As of: August 2023
Are actual meal expenses incurred during business trips deductible as business expenses?
No. For external business activities, the actual meal expenses incurred cannot be claimed as profit-reducing items. Instead, only the statutory per diem meal allowances pursuant to § 4 Abs. 5 Nr. 5 EStG in conjunction with § 9 Abs. 4a S. 3 EStG are deductible as business expenses.
As of: July 2022
Should VAT be paid to the tax office even if it is not shown on the invoice?
Yes, as a precaution, VAT should be declared and paid. If the services remain subject to VAT, no back payments will arise. If the services are ultimately classified as VAT-exempt, the driving school will receive the VAT paid back, plus 6% interest on the refund.
As of: March 2016
Should companies wait with the TSE conversion despite the non-objection period?
No, those affected should contact their POS system providers promptly. A further postponement beyond 30 September 2020 is not to be expected, and the required changes must be planned and implemented in good time.
As of: November 2019
Should previously rejected applications for the lump-sum allowance be resubmitted after the reform?
Yes. Individuals with a degree of disability between 20 and under 50 whose application was rejected up to 2020 due to the additional requirements of § 33b Abs. 2 EStG should file a new application with the tax office from 2021 onward. With the elimination of these additional requirements, they are now entitled to the lump-sum allowance.
As of: November 2021
Does a physical impairment of the employee play a role in assessing taxi costs?
A physical impairment is irrelevant when classifying a taxi as public transport under § 9 Abs. 2 S. 2 EStG. Even if the employee depends on a taxi for health reasons, the deduction is limited to the standard distance allowance (Entfernungspauschale). Any further deduction would only be possible under separate provisions, such as extraordinary expenses (außergewöhnliche Belastungen).
As of: December 2022
Does it matter that the employer operates two different businesses?
No. What matters is the natural person of the employer, not the individual business. If both jobs are performed for the same natural person – even if that person runs several businesses – the activities must be combined into a single employment relationship.
As of: February 2023
Does it matter whether the property is rented or owned?
No, for tax purposes it is irrelevant whether the accessibility modifications are carried out in an owner-occupied home or a rented property. The decisive factor is solely the medical or disability-related necessity of the measure.
As of: November 2019
Does it matter who pays the research funding?
No, for tax liability purposes it is irrelevant whether the research funding comes from the employer or from a third party. What matters is that the payment is connected to the recipient's employment relationship or professional activity. Prize money from third parties can therefore also constitute taxable employment income.
As of: August 2022
Under what conditions is income tax on PV profits waived?
Under the ruling of 02 June 2021, operators may be exempt from income tax if the system has a capacity of no more than 10 kW, was commissioned after 2003, is located on a single- or two-family home or on a property building owned by the operator, and any rental income from partial leasing does not exceed €520 per year.
As of: June 2021
Under what conditions can a deadline extension for the property tax return be granted?
A deadline extension can be requested from the competent tax authority at any time, but is only granted with a plausible justification. Recognized reasons include, for example, prolonged illness or, in individual cases, the time-consuming procurement of necessary documents and information. In Bavaria, the tax authorities also decide on extensions in justified individual cases.
As of: February 2023
Under what conditions is a rental compensation for the old apartment deductible?
Rental compensation can be claimed if, due to the notice period, rent must be paid simultaneously for both the old and new apartment, for a maximum of six months. Likewise deductible is double rent if you cannot move into the new apartment within three months. A precondition is always that the move is occupationally motivated.
As of: August 2021
Under what conditions are scholarships tax-exempt under § 3 No. 44 EStG?
Scholarships are tax-exempt under § 3 No. 44 EStG if they are funded from public sources, do not require a specific scientific, artistic, or employee-like service in return, and do not exceed the amount necessary to carry out the research task or cover the recipient's living expenses. All conditions must be met cumulatively.
As of: July 2022
Does a delayed inheritance tax assessment extend the relief period under § 35b EStG?
No. Even if the certificate of inheritance is issued only years after death and the inheritance tax is assessed accordingly late, the date of death remains decisive for the start of the five-year period. A late assessment does not postpone the beginning of the relief period.
As of: May 2024
When do repair and modernization measures begin within the meaning of the EStG?
The decisive point is the start of the construction work, which is marked by the filing of the building application or — for projects exempt from a building permit — by the submission of the construction documents (§ 52 Abs. 16 Satz 8 EStG as amended by the StÄndG 2003). Expenses incurred before this cut-off date are generally not attributable to the modernization measures.
As of: April 2023
When does the relief period for the tax reduction under Section 35b EStG begin?
The relief period begins when the inheritance tax arises, which in the case of an acquisition upon death is generally the date of the decedent's death. The time of the actual assessment or payment of the inheritance tax is irrelevant in this respect. The BFH has expressly clarified this.
As of: May 2024
When does a child studying abroad retain a domestic residence for child benefit purposes?
A child retains a domestic residence at the parents' home if rooms for living are permanently available there and the child visits the parental home with a certain regularity. The decisive provision is § 8 AO. Without these two conditions, the domestic residence — and thus generally the entitlement to child benefit — ceases to exist.
As of: October 2023
When does the obligation to contribute to the Künstlersozialkasse (German Artists' Social Insurance Fund) arise for non-typical exploiters?
An obligation to contribute arises when artistic or journalistic services are commissioned with a certain regularity and continuity, such that equal treatment with typical professional exploiters under § 24 Abs. 1 KSVG is justified. Merely exceeding the EUR 450 threshold is not sufficient.
As of: August 2022
When does tax class combination III/V lead to a back payment?
The III/V combination is designed for cases where the partner in tax class III earns about 60% and the partner in tax class V about 40% of the joint employment income. If the actual income ratio deviates significantly from this, the higher earner's wages are taxed too leniently during the year, which typically results in a back payment upon filing the income tax return. For this reason, couples using III/V are required to file an annual income tax return.
As of: May 2022
When does the discounting requirement for non-interest-bearing liabilities cease to apply under the 4th Corona Tax Assistance Act?
The 5.5% discounting requirement for non-interest-bearing liabilities with a remaining term of more than 12 months under § 6 Abs. 1 Nr. 3 EStG no longer applies for fiscal years ending after 31 December 2022. The same applies to provisions under § 6 Abs. 1 Nr. 3a lit. e sentence 1 EStG. At the taxpayer's request, the new rule may also be applied to earlier years.
As of: June 2022
When does the entitlement to Kindergeld for vocational training cease in cases of prolonged illness?
According to BFH case law, the entitlement under § 32 Abs. 4 S. 1 Nr. 2 a EStG ceases as soon as a medical prognosis indicates that the illness is highly likely to last longer than six months. The child is then deemed to be suffering from a long-term illness and can no longer be considered as being in vocational training.
As of: May 2022
When is the relief amount for single parents reduced on a pro rata temporis basis?
The relief amount is reduced for each full calendar month in which the requirements of § 24b EStG are not met. Relevant points in time include the month of the child's birth, the month of separation or marriage, and the month of a spouse's death. Example: If the first child is born in April 2022, the relief amount is only 9/12 of EUR 4,260, i.e. EUR 3,195.
As of: February 2023
When does a photovoltaic system trigger commercial infection of an asset-managing partnership?
If an asset-managing partnership (e.g. GbR) operates a photovoltaic system alongside its primary activity, it generates commercial income under § 15 EStG. Pursuant to § 15 Abs. 3 EStG, this reclassifies all of the partnership's income as commercial income, and all assets must be capitalized as business assets. However, this only applies if the de minimis threshold is exceeded.
As of: October 2023
When does the cash-basis (Zufluss-/Abfluss) principle not apply?
It does not apply to income from employment (§ 11 Abs. 1 S. 4 EStG in conjunction with § 38a Abs. 1 S. 2 EStG), to profit determination by comparison of business assets (Betriebsvermögensvergleich), or to acquisition and production costs that are allocated as expenses via depreciation (AfA). In these cases, allocation follows other principles.
As of: February 2022
When does the limited deduction of up to €1,250 for a home office apply?
The limited deduction of up to €1,250 per year is available if no other workplace is available to the taxpayer. This is not a flat rate; only actual expenses incurred can be claimed, up to this maximum amount. During the COVID-19 pandemic (01.03.2020–31.12.2021), working from home on the recommendation of the federal government was deemed a case in which no other workplace was available.
As of: November 2021
When does the small business regulation apply to PV system operators?
The small business regulation under § 19 UStG applies if turnover does not exceed €22,000 in the year of acquisition and €50,000 in subsequent years. For a short fiscal year, the turnover threshold must be reduced pro rata for the months without business activity.
As of: June 2021
Wann gilt die Kleinunternehmerregelung?
Unter bestimmten Umsatzgrenzen kann die umsatzsteuerliche Kleinunternehmerregelung genutzt werden. Die Infografik finden Sie im Merkblatt-Verzeichnis unter "Kleinunternehmer 2025". (Quelle: Deubner Verlag)
When is a relocation considered job-related?
A relocation is job-related in cases of transfer, change of workplace or position, taking up employment for the first time, or when it is predominantly in the employer's interest. A significant reduction in commuting time of at least one hour per day (round trip combined) also establishes a job-related reason. Only in these cases are relocation costs deductible as income-related expenses or eligible for tax-free reimbursement by the employer.
As of: August 2021
When does an asset qualify as fixed assets under § 247 Abs. 2 HGB?
An asset is classified as fixed assets if it is intended to serve the business on a permanent basis. The decisive factor is its long-term purpose, not merely occasional or short-term use. Repeatedly renting similar items for ongoing use also indicates classification as fixed assets.
As of: July 2022
When is a workplace at the employer's premises considered unreasonable due to noise pollution?
According to BFH case law (ruling of 6 November 2014, VI R 4/14), a workplace at the employer's premises is deemed unsuitable if certain noise levels are exceeded and consequential health damage is threatened. This applies particularly in cases of specific pre-existing conditions of the employee. In such cases, relocating to a home office can be recognised for tax purposes.
As of: January 2023
When does an educational institution qualify as a first place of work?
Under Section 9 (4) sentence 8 EStG, an educational institution qualifies as a first place of work (erste Tätigkeitsstätte) if it is attended outside of an employment relationship for the purpose of full-time studies or a full-time educational program. As a result, travel expenses are only deductible at the flat-rate distance allowance (Entfernungspauschale).
As of: June 2022
When does a second course of training still qualify as part of the initial training for child benefit purposes?
Two training phases can be combined into a single initial training if there is a close temporal and substantive connection and gainful employment is secondary to the training itself. The decisive factor is an overall assessment, examining, among other things, the time spent on employment and the use of qualifications already acquired. If the employment is the primary focus, the second phase counts as separate further training.
As of: June 2023