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 8 / 14
Which gainful employment is permissible for child benefit purposes after completing the initial vocational training?
Under § 32 Abs. 4 S. 2 f. EStG, a child who has completed initial vocational training is only taken into account if they do not pursue any harmful gainful employment. Permissible are a regular weekly working time of up to 20 hours, an employment relationship that is part of vocational training, or marginal employment under §§ 8, 8a SGB IV. If the 20-hour threshold is exceeded, the entitlement to child benefit ceases.
As of: June 2023
Which travel expenses can be claimed for tax purposes in the case of part-time distance learning?
According to the Lower Saxony Fiscal Court, a distance learning university does not qualify as the primary place of activity in a part-time study program. Therefore, trips to the university can be claimed under travel expense principles, either with the actual costs or at 0.30 € per kilometer driven. The deduction is not limited to the commuter allowance (Entfernungspauschale).
As of: June 2022
What consequences may arise from incorrect recording of tips?
Failures may lead to additional tax assessments by the tax office, fines of up to €25,000 and, in extreme cases, criminal tax proceedings. Proper separation and documentation of tips is therefore essential to avoid these risks.
As of: May 2021
What are the practical consequences of the ruling for sales of withdrawn properties?
Anyone who withdraws a property from business assets without recognizing profit and sells it within 10 years must fully tax the difference between the sales price and the book value as other income under § 23 EStG. This also applies to heirs and donees in the context of anticipated succession. No step-up to fair value for tax purposes takes place.
As of: July 2022
What are the tax consequences of waiving the profit-making intention?
Once the application is approved, no further income from business operations under § 15 EStG is generated, eliminating the need for an income-surplus statement and Annex G. This treatment applies not only to the current year but also to prior open and future assessment periods. VAT obligations, however, remain unchanged.
As of: January 2022
What are the consequences of the elimination of the EEG levy for operators of existing PV systems?
With the elimination of the EEG levy, generation meters will no longer be required from 2023 onwards and can be removed, even if they are leased from the grid operator. This significantly simplifies the annual billing, as the measurement of self-consumed electricity for the levy is no longer necessary.
As of: September 2022
What consequences does classification as wages have for the employer?
If the payment for vehicle advertising qualifies as wages, wage tax must be withheld and remitted. If the employer fails to do so, the tax office may hold the employer liable under wage tax liability rules, as occurred in the case at issue.
As of: February 2020
What are the consequences of a child turning 25 for the tax exemption on a property sale?
Upon completion of the 25th year of age, the child is no longer considered for income tax purposes under § 32 Abs. 4 Satz 1 Nr. 2 EStG. From this point on, providing the apartment to such a child no longer qualifies as use for own residential purposes. If the property is sold within the ten-year speculation period, the capital gain is then taxable.
As of: October 2023
What are the consequences of an exemption application filed after 02 January 2023?
After 02 January 2023, exemption from compulsory insurance is no longer possible in statutory health and long-term care insurance. In unemployment insurance, an exemption applied for at a later date only takes effect from the beginning of the calendar month following the application.
As of: September 2022
What are the consequences of an estimate by the tax office regarding real estate tax?
If the taxpayer fails to submit the real estate tax assessment declaration for an extended period, the tax office will estimate the taxable item. Experience shows that such estimates tend to be unfavorable for the taxpayer. The obligation to file the assessment declaration remains in place despite the estimate.
As of: February 2023
What are the consequences of exceeding the EUR 110 limit per person?
The amount exceeding EUR 110 qualifies as wages but may be taxed at a flat rate of 25%. In addition, the input VAT deduction is forfeited for the respective cost share per person once the threshold is exceeded.
As of: December 2019
What were the consequences of the BFH ruling for the sale of inherited KG interests after more than five years?
If the heir sells an inherited interest only after five years have passed since the date of death, the tax relief under § 35b EStG is excluded, even if the inheritance tax was assessed only shortly beforehand due to lengthy heir identification proceedings. The resulting capital gain is then fully subject to income tax without any reduction.
As of: May 2024
What consequences can the final reconciliation of Corona aid have?
After review by the granting authority, the final amount of funding is determined. This may result in confirmation of the original funding, an additional payment in favor of the applicant, or an obligation to repay. Incorrect information from the original application can also be corrected retroactively in this process.
As of: May 2022
Which allowances apply to spouses and children in cases of inheritance or gift?
Spouses and registered civil partners are entitled to a general allowance of EUR 500,000, while children, stepchildren, adopted children, and children of deceased children receive EUR 400,000. Grandchildren are granted EUR 200,000, and great-grandchildren as well as parents and grandparents (in the case of inheritance) receive EUR 100,000 each. In addition, there is an allowance for household goods (EUR 41,000) and for other movable assets (EUR 12,000).
As of: January 2022
What exemption thresholds apply to the construction withholding tax?
No tax deduction is required if the consideration paid to the respective service provider does not exceed EUR 5,000 per calendar year. If the recipient of the service exclusively generates VAT-exempt rental and leasing turnover pursuant to § 4 Nr. 12 UStG, the threshold increases to EUR 15,000 per calendar year. Once these limits are exceeded, the deduction must be made unless a valid exemption certificate is presented.
As of: May 2023
What deadline applies to the option application under the KöMoG?
The option application must be submitted to the competent Finanzamt at least one month before the start of the new fiscal year. A prior shareholder resolution with at least 75% approval is required. The same one-month deadline also applies to a later withdrawal application.
As of: July 2021
What deadline applies for reporting the exemption application to the Minijob-Zentrale?
The employer must report the exemption application to the Minijob-Zentrale within 42 calendar days, or 6 weeks, of receiving it from the employee. If this deadline is met and the Minijob-Zentrale does not object, the exemption takes retroactive effect from the month of application, but no earlier than the start of employment.
As of: September 2022
What deadlines apply to the tax return under the OSS procedure?
The tax return must be filed quarterly via the BZSt online portal. The deadlines are: 30 April for Q1, 31 July for Q2, 31 October for Q3, and 31 January of the following year for Q4. A nil return is mandatory even if no relevant turnover was generated in the quarter.
As of: June 2021
What deadline extension does the BMF grant to avoid withdrawal taxation?
Under the BMF circular of 17 July 2023, withdrawal taxation is waived on grounds of legitimate expectations if the taxation link to the hidden reserves is restored on other grounds by 31 December 2023. This leaves time to implement a suitable structuring solution.
As of: October 2023
Which structuring options avoid withdrawal taxation when commercial infection ceases?
Options include converting into a commercially characterised partnership (e.g. GmbH & Co. KG), expanding the PV system beyond the limits of § 3 Nr. 72 EStG, taking up another commercial activity, or contributing the assets into a commercially active co-entrepreneurship or corporation. Before deciding, it should be examined whether continued tax entanglement is economically sensible.
As of: October 2023
What reasons led to the draft of the 2022 Tax Relief Act (Steuerentlastungsgesetz 2022)?
The background is the sharply rising cost of living, particularly in the energy sector, as a result of inflation, supply bottlenecks caused by the Corona pandemic, and the Ukraine-Russia conflict. The aim is to provide relief especially for low-income groups while simultaneously reducing the administrative burden on the tax authorities.
As of: March 2022
What are the maximum amounts for the extended loss carryback under § 10d EStG?
The extended loss carryback has been prolonged to cover the 2022 and 2023 assessment periods. The maximum amounts are EUR 10 million for individual assessment and EUR 20 million for joint assessment. The original maximum amounts of EUR 1 million and EUR 2 million respectively will only apply again from the 2024 assessment period onwards.
As of: June 2022
Which inventory methods are permitted under the HGB (German Commercial Code)?
Three methods are permitted: the balance sheet date inventory within 10 days before or after the reporting date, the time-shifted inventory up to three months before or two months after the reporting date with value adjustment pursuant to § 241 Abs. 3 HGB, and the perpetual inventory based on warehouse accounting. For the perpetual inventory, stock levels must be checked regularly and verified for accuracy.
As of: November 2023
What are the terms of the Neustarthilfe Plus, and can it be combined with the Überbrückungshilfe III Plus?
The Neustarthilfe Plus is aimed at solo self-employed individuals, cooperatives, and comparable applicants. The maximum reimbursement is €4,500 and corresponds to 50% of revenue compared with the reference period. Neustarthilfe Plus and Überbrückungshilfe III Plus cannot be applied for in parallel.
As of: October 2021
What are the consequences of submitting the property tax assessment return late?
Late submission may trigger late-filing surcharges under § 152 AO (at least EUR 25 per month commenced) as well as coercive fines (at least EUR 200). In addition, the tax office may impose an unfavorable estimated assessment, while the filing obligation remains in place despite the estimate. In most federal states, taxpayers in default first receive a reminder letter.
As of: February 2023
Which work clothing expenses are deductible as income-related expenses?
Deductible items include the acquisition costs of typical occupational clothing as well as cleaning and repair expenses. When purchasing, buying from a specialist retailer is recommended to substantiate the professional nature of the clothing. Damage to private clothing may also be deductible in exceptional cases, provided that the damage demonstrably occurred during work-related activities.
As of: December 2021
Which costs for a home office are deductible and how are they allocated?
Deductible on a pro rata basis are rent, utilities (electricity, water, gas), cleaning costs, insurance, waste disposal, chimney sweep fees, property tax, building depreciation (AfA), and financing interest. The allocation is based on the ratio of the home office's square meters to the total living area. Costs that exclusively relate to the home office (e.g. wallpaper, carpets, curtains) are fully deductible. Work equipment is not part of the room costs and is either written off immediately up to EUR 800 (low-value assets) or depreciated over its useful life if above this threshold.
As of: November 2021
Which costs are no longer eligible under Bridging Assistance IV (Überbrückungshilfe IV)?
Compared to Bridging Assistance III Plus, modernization and renovation costs are no longer eligible cost items under Bridging Assistance IV. The remaining eligible fixed cost categories remain largely unchanged.
As of: December 2021
Which costs are included in the EUR 110 threshold for a company event?
All expenses related to the event count toward the allowance, including food and beverages, entertainment, transportation, venue rental, music, entrance tickets, gifts, and planning costs. The total costs are divided by the number of all persons actually present.
As of: December 2019
Which costs qualify as actual business expenses in childminding services?
Deductible business expenses include all costs directly related to childcare, such as activity materials, hygiene products, meals, travel costs, and special childcare insurance. Rental costs for rooms used for childcare can also be claimed. These items are typically reported within a cash-basis income statement (Einnahmenüberschussrechnung).
As of: July 2021
Which cost components of a tradesperson's invoice are eligible under § 35a EStG?
Only labor costs as well as machine and travel costs are eligible. Material costs are excluded from the tax reduction and must be shown separately on the invoice so that the labor portion is clearly identifiable.
As of: December 2022
What criteria must a home office meet for tax purposes?
The home office must be integrated into the domestic sphere, used primarily for intellectual, written, or organizational work, and used at least 90% for business purposes. It must be separated from the rest of the living area by a door and walls — curtains are not sufficient (BFH VIII R 10/12). A 'work corner' in the living room or a walk-through room is not recognized, nor is a room containing private items such as a television or wardrobe.
As of: November 2021
Which criteria do the Familienkasse and the courts examine regarding the relationship between training and employment?
The review focuses in particular on the time ratio between training hours and working hours, and on whether the child is already using the qualifications acquired in the first stage through the employment. The contractual ties to the employer are also taken into account. If the time criterion remains neutral, the other indicators can be decisive in determining whether the employment takes precedence over the training.
As of: June 2023
Which services from the service charge statement are tax-privileged under § 35a EStG?
Tax-privileged services include in particular household-related services such as stairwell cleaning, snow removal, and garden maintenance (§ 35a Abs. 2 EStG), as well as tradesman services such as the functional inspection of smoke detectors (§ 35a Abs. 3 EStG). The prerequisite is a close connection to the running of the household and that the service is performed within the taxpayer's home.
As of: August 2023
Which services are subject to the construction withholding tax under § 48 EStG?
All services that involve the construction, repair, maintenance, alteration, or removal of structures are covered. The term "structure" is broadly defined and includes all installations connected to the ground, such as tunnels. Pure planning services by architects or structural engineers, as well as maintenance and cleaning work, are not covered, provided they are not subordinate to a construction service as an ancillary service.
As of: May 2023
Which payments must be included in the assessment basis for the artists' social security levy (Künstlersozialabgabe)?
All payments made for obtaining or using the work or services must be included. This particularly covers fees and commissions paid for the sale of the work, as well as ancillary costs such as telephone, freight, material, and personnel expenses. VAT paid to the artist or publicist is not included in the assessment basis.
As of: January 2022
What capacity limits apply to the tax exemption for PV systems under § 3 Nr. 72 EStG?
The maximum tax-exempt gross capacity depends on the building type: 30 kW (peak) for single-family homes and non-residential buildings with a single unit (e.g., a commercial property with one commercial unit or a garage property). For two-/multi-family homes, mixed-use properties, and commercial properties with multiple units, the limit is 15 kW (peak) per residential or commercial unit. The decisive figure is the gross capacity as listed in the Marktstammdatenregister (German Market Master Data Register).
As of: August 2023
In a chain transaction, which supply is the moving supply?
In a chain transaction, the movement of goods can only be attributed to one supply (§ 3 Abs. 6a UStG). If the first supplier transports the goods, their supply to the first purchaser is the moving supply, which may qualify for the VAT exemption for intra-Community supplies. The subsequent supply is treated as a stationary supply, with its place of supply at the end of the transport (§ 3 Abs. 7 S. 2 Nr. 2 UStG).
As of: February 2024
What majority is required to approve a restructuring plan?
The restructuring plan no longer requires unanimous approval; a majority of 75% of the creditors' voting rights is sufficient (§ 9 StaRuG). This removes a key reason why restructuring plans have failed in the past. The plan can be implemented by the company itself or through the court.
As of: April 2021
What evidence is required for property tax relief on vacant properties?
For vacant properties, the 50% relief is only granted if the landlord can prove active efforts to find new tenants. Suitable evidence includes invoices from real estate agents or listings on property portals.
As of: March 2021
Which ancillary activities are harmless for the extended trade tax reduction but not themselves privileged?
Harmless activities include managing one's own capital assets, developing residential buildings, constructing and selling single-/two-family homes or condominiums (provided this does not constitute commercial real estate trading), and supplying electricity from renewable energy sources to tenants. However, the profits from these activities are not privileged and remain subject to trade tax.
As of: March 2023
What non-objection rule did the BMF issue regarding TSE retrofitting?
By letter dated 6 November 2019, the BMF issued a non-objection rule limited until 30 September 2020. During this period, the use of cash register systems without a certified technical security device (TSE) was not objected to, as only a few providers were able to deliver.
As of: November 2019
Which provision governs the deduction of work-related expenses for trips between home and the primary place of work?
The relevant provision is § 9 Abs. 1 S. 3 Nr. 4 EStG. Under this rule, expenses are covered on a flat-rate basis by the commuter allowance (Entfernungspauschale) per full kilometer of distance. Higher actual expenses may only be claimed under § 9 Abs. 2 S. 2 EStG when public transportation is used – not for car or taxi travel.
As of: December 2022
What options exist after the 20-year EEG feed-in tariff expires?
Operators can continue selling electricity through power providers (approx. 4-5 cents/kWh) or directly to private buyers such as neighbours or municipalities, retrofit a battery storage system, replace the modules with more efficient technology, or dismantle the installation. The choice significantly affects depreciation and input VAT deduction options.
As of: June 2021
Which photovoltaic systems are to become exempt from income tax under the JStG 2022?
An exemption is planned for income from photovoltaic systems of up to 30 kW (gross nominal capacity per the Market Master Data Register) installed on, at or in single-family homes (including ancillary buildings) and commercial properties. For buildings used predominantly for residential purposes, such as multi-family homes, a limit of 15 kW per residential or commercial unit applies. An overall cap of 100 kW (peak) applies per taxpayer or co-entrepreneurship.
As of: October 2022
What lump-sum deduction applies in 2023 for secondary scientific, artistic, or teaching activities?
For self-employed secondary activities of a scientific, artistic, literary, teaching, or examining nature, the lump-sum business expense deduction amounts to up to 25% of operating income from 2023 onwards, capped at EUR 900 per year. Previously, the maximum was EUR 614 per year.
As of: December 2023
What obligations and elective rights apply to permanent impairment of fixed assets?
Under German commercial law, a permanent impairment of fixed assets triggers a mandatory extraordinary write-down. Under tax law, by contrast, a write-down to going-concern value (Teilwertabschreibung) is elective. If the impairment is not permanent, an extraordinary write-down is generally prohibited under commercial law (exception: financial assets) and not permitted for tax purposes.
As of: April 2021
Which photovoltaic systems and combined heat and power plants can waive the profit-making intention?
Eligible applicants are operators of photovoltaic systems with an installed capacity of up to 10 kW/kWp and combined heat and power plants of up to 2.5 kW/kWp. All taxable persons as well as co-entrepreneurships qualify. Multiple systems operated by the same person are treated as a single business, meaning their capacities are aggregated regardless of whether they are located on one or several properties.
As of: January 2022
What review and warning duties do Steuerberater have under § 102 StaRuG?
Under § 102 StaRuG, Steuerberater (German Certified Tax Advisors), Rechtsanwälte (German Attorneys-at-Law) and Wirtschaftsprüfer (German Statutory Auditors) acting as external reviewers are legally required to alert their clients to potential grounds for insolvency. When examining client records, they must specifically watch for any indications of insolvency. This obligation supplements the warning duties already established by BFH case law.
As of: April 2021
What invoice requirements apply for input VAT deduction on meal expenses?
A proper invoice is required, showing VAT separately and naming the entrepreneur or company as the recipient of the service. For partnerships and corporations, only the company itself is entitled to deduct input VAT. For small-value invoices up to EUR 250 (§ 33 UStDV), the recipient does not need to be specified.
As of: July 2022