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 7 / 14
Was muss ich zur Erbschaft- und Schenkungsteuer wissen?
Freibeträge und Steuerklassen bestimmen die Erbschaft- und Schenkungsteuer. Die Infografik finden Sie im Merkblatt-Verzeichnis unter "Erbschaftsteuer". (Quelle: Deubner Verlag)
What happens if old Dutch VAT IDs are used in EC Sales Lists from 2020 onwards?
From 1 January 2020, only the new Dutch VAT IDs of sole proprietors may be used in EC Sales Lists (Zusammenfassende Meldungen). Using the old numbers will trigger error messages. This may call into question the VAT exemption of the underlying supply.
As of: January 2020
What happens if performance thresholds are exceeded or fallen short of during the year?
If an object- or subject-related threshold under § 3 Nr. 72 EStG is exceeded or fallen short of during the year, the tax exemption applies on a pro rata basis up to or from that point in time. Typical triggers include the addition of a residential or commercial unit or the commissioning of an additional installation. Example: If a conversion increases the number of commercial units as of August 1, a previously taxable installation becomes tax-exempt from that date onward.
As of: August 2023
What happens if the pension insurance exemption is reported late to the Minijob-Zentrale?
If the 6-week deadline is missed, the employer must provide an explanation for the delay. The exemption then only takes effect after the end of the month following the month in which the notification is received by the Minijob-Zentrale. Until that point, the employee remains subject to mandatory pension insurance and must continue to pay contributions.
As of: September 2022
What happens to input VAT deduction if more than two company events take place per year?
Input VAT deduction within the EUR 110 threshold is only available for a maximum of two company events per year. For any additional events, the tax authorities no longer assume a predominantly business-related interest, meaning the expenses are deemed privately co-induced and input VAT deduction is excluded.
As of: August 2023
What happens to the prepayment penalty when a property sale is not taxable?
If the sale is not taxable under § 23 EStG (e.g., outside the 10-year holding period), the prepayment penalty is entirely lost for tax purposes. It can be deducted neither as income-related expenses from rental income nor as selling costs in private disposal transactions.
As of: February 2024
What happens if VAT is shown on the invoice but the service is later deemed tax-exempt?
In this case, the driving school still owes the VAT shown on the invoice pursuant to Section 14c UStG. To avoid paying the tax, all affected invoices issued to customers would have to be corrected, which involves considerable administrative effort.
As of: March 2016
What happens if the energy price allowance was credited twice?
If a taxpayer receives the allowance both through their employer and as a reduction of the income tax prepayment for business income (e.g., from a photovoltaic system), a correction is made within the 2022 income tax assessment so that the allowance is granted only once.
As of: July 2022
What happens if the subsidised dwelling is sold or used personally within the 10-year period?
If the paid rental use ends before the 10-year period expires, this must be reported to the tax office, and the special depreciation already granted will be revoked retroactively. In the case of a sale, no reversal applies if it can be demonstrated that the purchaser continues to rent the dwelling out for consideration. Holiday apartments, hotels and short-term lodging are generally excluded from the subsidy.
As of: March 2023
What are operating fixtures (Betriebsvorrichtungen) for VAT purposes?
Operating fixtures (Betriebsvorrichtungen) are devices of any kind with a machine-like function that are used directly to carry on a trade or business. Examples include freight elevators, work platforms, conveyor belts, and bowling alleys. A detailed list is provided in the decree on § 68 BewG, Annexes 1 and 2.
As of: September 2023
What are tenant fit-outs and tenant conversions (Mietereinbauten and Mieterumbauten)?
Mietereinbauten and Mieterumbauten are construction measures that an authorized user (tenant) commissions in their own name and at their own expense on a third party's land or building, provided they do not merely constitute maintenance expenses. Under certain conditions, they can be capitalized and depreciated as fixed assets of the tenant, even though the building legally belongs to the landlord.
As of: July 2023
What qualifies as 'assets for everyday use' under German speculation tax rules?
Assets for everyday use are items that typically depreciate in value and have no significant potential for appreciation. Typical examples include used cars or household furnishings. Gains from their sale are exempt from taxation as private disposal transactions under § 23 Abs. 1 Satz 1 Nr. 2 Satz 2 EStG.
As of: January 2021
What are acquisition-related production costs under § 6 Abs. 1 Nr. 1a EStG?
Acquisition-related production costs are expenses for repair and modernization measures carried out within three years after acquiring a building, where these expenses exceed 15 percent of the acquisition costs (excluding VAT). Such expenses are not immediately deductible but must be depreciated over the building's useful life.
As of: April 2023
What are acquisition-related production costs (anschaffungsnahe Herstellungskosten)?
Acquisition-related production costs are expenses for the repair and modernization of a building that are incurred within 3 years after acquisition and exceed 15% of the acquisition costs (net) (§ 6 Abs. 1 Nr. 1a EStG). They must be added to the production costs, capitalized, and depreciated over the useful life. An immediate deduction as income-related expenses is therefore not permitted.
As of: June 2023
What are regularly recurring income and expenses within the meaning of § 11 EStG?
Regularly recurring income and expenses are payments such as rent, lease, interest, or insurance premiums that occur at consistent intervals. If payment is made shortly (within 10 days) before or after year-end and was also due within this period, it is exceptionally allocated to the year of economic association. This follows from § 11 Abs. 1 S. 2 and Abs. 2 S. 2 EStG.
As of: February 2022
What should be reviewed before applying for a waiver of profit intention?
Since the rule also applies retroactively, you should check whether tax assessments from previous years are already final or whether losses from operating the system could still be claimed. Once the waiver is granted, no commercial income exists, so previously unused losses may be forfeited. A careful weighing of the simplification benefit against potential tax disadvantages is therefore advisable.
As of: January 2022
What should be clarified before starting an inventory of goods?
Before the inventory begins, the date of execution and the responsible inventory manager should be defined. Stock items must be clearly organized, and potential product groups or related items should be reviewed in advance. Thorough preparation is essential, as determining the inventory of goods accounts for the largest share of time during the inventory process.
As of: November 2023
What should employers specifically do as of 01.10.2022?
Employers should actively ask affected employees in the pay range of EUR 450.01 to 520 whether they wish to make use of the exemption option. A written notice is recommended, informing them about grandfathering protection, deadlines, and consequences. The employees' decision must be documented and implemented in payroll accounting.
As of: September 2022
What should parents consider for tax purposes when providing student apartments?
Parents should note that providing an apartment to children free of charge only qualifies as owner-occupation as long as the children are eligible under § 32 EStG (generally until age 25 during their education). A sale within the ten-year speculation period should therefore take place within this timeframe in order to realize the capital gain tax-free.
As of: October 2023
What should German entrepreneurs with Dutch business partners do?
German entrepreneurs with supply and service relationships involving Dutch sole proprietors should request the new VAT ID number well before the first transaction in 2020. Otherwise, problems may arise with the EC Sales List and with the VAT exemption for intra-Community supplies.
As of: January 2020
What distinguishes a reverse Betriebsaufspaltung (business split) from the classic form?
In a reverse Betriebsaufspaltung, the holding corporation is controlled by the operating corporation – not the other way around. Due to the prohibition on look-through taxation (Durchgriffsverbot), the circumstances of the shareholder may not be used for taxing the holding company. As a result, no genuinely commercial activity arises at the level of the holding company.
As of: June 2024
What distinguishes an operating fixture from other tenant fit-outs?
An operating fixture (Betriebsvorrichtung) does not serve the use of the building itself but directly supports the tenant's business operations and performs a machine-like function, such as freight elevators, conveyor belts, or work platforms. Other tenant fit-outs, by contrast, serve the use of the building and are only capitalized if the tenant becomes the economic owner or if a specific operational benefit applies.
As of: July 2023
Was verlangen die GoBD an die Buchführung?
Die GoBD stellen Anforderungen an die ordnungsmäßige, unveränderbare digitale Buchführung. Die Infografik finden Sie im Merkblatt-Verzeichnis unter "GoBD". (Quelle: Deubner Verlag)
What qualifies as a "reimbursed expense" within the meaning of § 10 Abs. 4b EStG?
Reimbursed expenses include all returns in cash or cash equivalents that increase the taxpayer's assets and represent a reversal of previous expenditures. The term is to be interpreted broadly; the factual or legal reason for the inflow is irrelevant. Reimbursements resulting from a change in insurance liability also fall under this definition.
As of: August 2023
What specifically changes in the income capitalisation approach for property valuation?
Management costs are no longer derived as a flat rate from the annual rent, but applied based on the fixed values of the new Annex 23 BewG, covering administrative costs, area-based maintenance costs, and a rental loss risk allowance. A distinction is made between private and commercial use, and the values are adjusted annually in line with the consumer price index. In addition, the property interest rates are reduced, for example from 5% to 3.5% for residential rental properties, which increases the building value.
As of: November 2022
What changes on 01/10/2022 regarding minimum wage and the marginal earnings threshold?
As of 01/10/2022, the statutory minimum wage rises from EUR 10.45 to EUR 12 per hour. At the same time, the marginal earnings threshold for mini-jobs is raised from EUR 450 to EUR 520 per month. Employees earning between EUR 450.01 and EUR 520 are therefore generally classified as mini-jobbers.
As of: September 2022
What filing deadline applies when the tax return is prepared by a Steuerberater?
If the return is prepared by a Steuerberater (German Certified Tax Advisor), the deadline is extended under § 149 Abs. 3 AO to the last day of February of the second following year. For 2022, the relevant date is therefore 29 February 2024. This deadline is also extended if the cut-off date falls on a weekend or public holiday.
As of: July 2021
What requirements apply to a one-year study abroad for child benefit (Kindergeld) entitlement?
For a stay abroad for educational purposes that is initially planned for only one year, the absence of return visits home does not result in the loss of the domestic residence. During this period, the child therefore does not need to regularly visit the parental home in order to maintain the residence — and thus the entitlement to Kindergeld.
As of: October 2023
Welche Anforderungen gelten für elektronische Kassen?
Elektronische Kassen brauchen u. a. eine zertifizierte Sicherheitseinrichtung und unterliegen Aufzeichnungspflichten. Die Infografik finden Sie im Merkblatt-Verzeichnis unter "Kassen – Elektronische Kasse". (Quelle: Deubner Verlag)
Which groups of employees are eligible to receive the inflation compensation bonus?
In principle, all employees within the meaning of tax law can receive the inflation compensation bonus (IAP), regardless of their type of employment. This includes full-time and part-time staff, mini-jobbers, short-term employees, trainees, paid interns, employees on short-time work, parental leave or sick pay, as well as volunteers and participants in the Federal Voluntary Service.
As of: January 2023
Which components of employment income are excluded from the calculation?
Tax-exempt employment income — such as foreign-source wages or tax-free employer benefits — and wages from minijobs taxed at a flat rate are not included. Only the gross employment income is considered, without deducting income-related expenses or the standard employee allowance (Werbungskostenpauschbetrag).
As of: February 2022
What views exist on the 6-year period in cases of partly paid transfers above book value?
The tax authorities (BMF circular dated 13.1.1993) take the view that fixed assets must be split into a paid and an unpaid portion. If, however, one consistently applies the unitary theory and assumes a single acquisition transaction, the 6-year period would have to start running entirely anew from the date of business acquisition.
As of: August 2022
Which expenses can be claimed as training costs in a tax return?
Deductible items include interest on education loans (e.g. BAföG), tuition fees and semester contributions, work equipment such as a computer, desk and office chair, travel costs to the place of training or university, application costs (for example for a study place or a semester abroad), and relocation expenses related to the training.
As of: August 2023
Which expenses are typically affected in usufruct transfers?
Affected items are primarily depreciation (AfA) and financing interest incurred by the new owner for the transferred property. During the term of a reserved usufruct, these expenses generally cannot be claimed for tax purposes by either the usufructuary or the new owner, unless an exception applies.
As of: October 2023
Which expenses are excluded from acquisition-related production costs?
Excluded are expenses for building extensions such as additions or attic conversions pursuant to § 255 Abs. 2 S. 1 HGB, as well as recurring annual maintenance work (§ 6 Abs. 1 Nr. 1a S. 2 EStG). Also excluded are costs incurred before the acquisition of the building (BFH, decision of 28.4.2020, IX B 121/19).
As of: June 2023
Which expenses are added back under Section 8 No. 1 lit. e GewStG?
Half of the rental and lease payments (including leasing installments) for the use of immovable fixed assets owned by a third party must be added back. A prerequisite is that the expenses were previously recognized as business expenses reducing profit. In total, one quarter of the sum of all add-back items under Section 8 No. 1 GewStG is added to trade income, taking into account the allowance of EUR 200,000.
As of: July 2022
How does the 2022 Tax Relief Act (Steuerentlastungsgesetz 2022) affect the choice of tax class?
Among other measures, the Steuerentlastungsgesetz 2022 raised the employee lump-sum allowance (Arbeitnehmer-Pauschbetrag) to €1,200. This change has been incorporated into the updated 2022 guidance on choosing a tax class and into the BMF comparison tables, so that the most favorable tax class combinations now reflect the new allowances.
As of: May 2022
What impact does § 3 Nr. 72 EStG have on investment deduction amounts (IAB) already formed under § 7g EStG?
For fiscal years ending after 31 December 2021, forming an IAB for tax-privileged PV systems is no longer possible, as no profit is to be determined. IABs formed before 1 January 2022 and not yet added back by 31 December 2021 must be reversed pursuant to § 7g Abs. 3 EStG if the investment was made in a tax-privileged PV system. An IAB remains permissible only in businesses whose purpose is not solely the generation of electricity from PV systems.
As of: August 2023
Which construction cost and assessment base limits apply to the special depreciation under § 7b EStG?
For building applications filed between 01/09/2018 and 31/12/2021, acquisition/production costs may not exceed EUR 3,000/sqm, with the assessment base capped at EUR 2,000/sqm. For applications filed between 01/01/2023 and 31/12/2026, the construction cost ceiling is EUR 4,800/sqm and the assessment base is capped at EUR 2,500/sqm. If costs exceed the ceiling, the incentive is forfeited; if they only exceed the assessment limit, the capped amount applies.
As of: March 2023
What is the significance of the look-through prohibition for the extended trade tax reduction?
The look-through prohibition prevents the taxation of the holding corporation from being based on the circumstances of its shareholder. As a result, a reverse business split (umgekehrte Betriebsaufspaltung) cannot lead to genuinely commercial activity of the holding company. The extended trade tax reduction therefore remains applicable.
As of: June 2024
What is the significance of the EUR 110 threshold for input VAT deduction?
If benefits per participant including VAT remain at no more than EUR 110, the tax authorities treat them as customary and predominantly business-related, allowing the input VAT deduction. If the threshold is exceeded, an exclusively private benefit for the employees is assumed and the input VAT deduction is denied in full. A further requirement is that no more than two company events are held per year.
As of: August 2023
What is the tax significance of allocating the purchase price between land and building?
The allocation is decisive for the amount of depreciation, as only the building portion is depreciable and can be claimed as income-related expenses or business expenses via AfA (depreciation for wear and tear). A higher building portion results in a higher AfA volume and therefore a lower tax burden.
As of: January 2023
What is the significance of the six-month threshold for child benefits in cases of ill trainees?
The six-month threshold is the decisive criterion distinguishing child benefits granted on grounds of vocational training from those granted on grounds of disability. If the projected duration of the illness does not exceed six months, the child retains trainee status. If, according to the medical prognosis, the illness is expected to last longer, entitlement is only possible under the disability provisions.
As of: May 2022
What is the significance of § 2 Abs. 5 GewStG when leasing a commercial business?
Under § 2 Abs. 5 GewStG, the lease of essential operating assets is treated as a cessation of the business by the former operator and as a new establishment by the lessee. This therefore constitutes a deemed new business formation. As a consequence of this fiction, the lessee participates in commercial activity from the start of the lease.
As of: February 2022
What visitation rule applies during multi-year studies abroad for child benefit eligibility?
During a multi-year stay abroad, the child must spend the majority of the training-free periods (e.g., semester breaks) — more than half of that time — at the parents' domestic residence. The relevant assessment period is generally one academic or training year. If this threshold is not met, the domestic residence is deemed abandoned.
As of: October 2023
What type of income does a childminder generate for tax purposes?
A childminder can generate either income from employment (§ 19 EStG) or income from self-employment (§ 18 Abs. 1 Nr. 1 EStG). In practice, self-employment income predominates, as the activity is usually carried out on a freelance basis and without any prescribed training. Employment income only applies if the childminder is bound by instructions regarding the location, time and manner of care and the parents or a public body act as the employer.
As of: July 2021
Which income and withdrawals from PV systems are tax-exempt under § 3 Nr. 72 EStG?
All income is tax-exempt regardless of how the electricity is used, in particular feed-in tariffs, payments for electricity supplied to tenants, charges for charging electric vehicles, subsidies, and VAT collected or refunded under the cash-basis accounting (EÜR). Withdrawals for non-business purposes are also tax-free, such as private residential use, the home office, or charging private electric vehicles. The sale of the PV system likewise falls under the exemption, provided the business generates exclusively privileged income.
As of: August 2023
Which inheritance tax classes exist and who falls into which class?
Tax Class I covers spouses, registered civil partners, children, grandchildren, as well as parents and grandparents (the latter only in cases of inheritance). Tax Class II includes siblings, nieces, nephews, sons- and daughters-in-law, stepparents, divorced spouses, and parents and grandparents in cases of gifts. Tax Class III applies to all other persons, such as uncles, aunts, unmarried partners, friends, and neighbors.
As of: January 2022
What relief measures exist for extraordinary depreciation during the Corona pandemic?
During the pandemic, extraordinary depreciation and write-downs to going-concern value may be recorded during the year, allowing losses to be claimed early and facilitating deferral applications. In addition, retailers can recognize losses in value through extraordinary depreciation as eligible fixed costs under Bridging Aid III (Überbrückungshilfe III) and obtain reimbursement accordingly.
As of: April 2021
Which income taxes can heirs still deduct as estate liabilities?
Income taxes remain deductible if they originate from tax-relevant circumstances of the decedent. Examples include outstanding income tax prepayments or back payments, for instance arising from rental and lease income earned by the decedent during their lifetime.
As of: October 2023