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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2304 questions · Page 10 / 47
Can younger employees demand application of the longest notice period of seven months?
No. There is no requirement to align all employees with the longest notice period of seven months regardless of length of service. The BAG has clarified that the statutory graduated scale is compatible with the prohibition of discrimination.
As of: December 2014
Can new owners deduct income-related expenses in advance under a reserved usufruct?
No, the BFH denies the deduction of anticipated income-related expenses by the new owner when the property has been transferred subject to a reserved usufruct (Vorbehaltsnießbrauch). The required temporal connection with future rental income is missing, since the end of the usufruct cannot be foreseen.
As of: October 2023
Can sports clubs invoke Art. 132(1)(m) of the VAT Directive?
No, a direct reliance on the VAT exemption under Art. 132(1)(m) of the VAT Directive is no longer possible following the CJEU judgment of 10 December 2020 (C-488/18) and the subsequent BFH decision. This applies in particular if the club's non-profit status is doubtful or if no binding allocation of assets to charitable purposes exists.
As of: May 2022
Can taxpayers rely on the ruling of the FG Berlin-Brandenburg?
Yes. Since the tax office did not file an appeal, it can be assumed that the tax authorities accept the decision. Taxpayers in comparable cases can therefore rely on the ruling. However, an identical positive outcome is not guaranteed, as each case must be assessed individually.
As of: January 2023
Can two home offices be claimed for tax purposes?
No. According to the ruling of the FG Rheinland-Pfalz dated 25 February 2015 (Az. 2 K 1595/13), a taxpayer cannot deduct two home offices even if maintaining two residences for professional reasons. The maximum amount of 1,250 euros is person- and object-related and is granted only once per year. Simultaneous use of two home offices is effectively impossible.
As of: April 2015
Can Überbrückungshilfen III Plus and Neustarthilfen Plus be applied for at the same time?
No, a parallel application is not possible. Solo self-employed individuals and other eligible applicants must choose between Überbrückungshilfen III Plus and Neustarthilfen Plus.
As of: November 2021
Is it negligent to collect seemingly harmless duds?
Yes, picking up and carrying allegedly unexploded firecrackers is considered negligent. Since it is known that such explosive devices can detonate with a delay, an explosion must be anticipated. This conduct establishes personal liability for any resulting damages.
As of: December 2013
Does applying § 10 Abs. 4b EStG to prior years violate the prohibition of retroactivity?
No. The rules in force since 2012 apply to all reimbursements received after 31 December 2011, even if the underlying contributions were paid in earlier assessment periods. The BFH does not consider this a violation of the constitutional prohibition of retroactivity.
As of: August 2023
Does a compulsory auction constitute a private disposal transaction?
Yes, a compulsory auction qualifies as a private disposal transaction within the meaning of § 23 Abs. 1 Nr. 1 EStG. The reasoning is that the owner can avert the auction by settling their outstanding liabilities. This option is regarded as a deliberate act on the part of the taxpayer.
As of: May 2022
Does the symbolic purchase of a mobile phone constitute abuse of legal structuring under § 42 AO?
No, the BFH rejects abuse of legal structuring. Purchasing employees' private mobile phones is a straightforward way to acquire business devices, especially since employees must return the devices when their employment ends. The amount of the acquisition costs is irrelevant for the tax exemption under § 3 Nr. 45 EStG.
As of: February 2023
Is it tax-beneficial to defer the start of retirement?
From a tax perspective, deferral is generally disadvantageous, as the taxable portion increases with each later starting year while the tax-free portion is permanently reduced. This is offset, however, by higher pension payments resulting from the upward adjustment of accrued entitlements. An individual comparative calculation is therefore advisable before making a decision.
As of: April 2023
Will waiving the small business regulation still be worthwhile when purchasing a PV system in the future?
Most likely not. Since the supply and installation of PV systems and related components will be subject to a zero VAT rate, no VAT will be charged on the purchase. This eliminates the main reason for waiving the small business regulation, which was to reclaim input VAT.
As of: October 2022
Is an appeal only worthwhile for high interest amounts?
An appeal is particularly advisable when interest claims are substantial, as meaningful relief is possible in such cases. For smaller amounts, the effort may exceed the potential refund, so a case-by-case review is recommended.
As of: February 2014
Can the ruling on eBay sales be applied to other sales platforms?
Yes, the principle established by the Tax Court of Baden-Württemberg is not limited to eBay. The occasional sale of private assets through several similar transactions generally does not constitute a VAT-liable business activity, regardless of the distribution channel used.
As of: September 2012
Does trade tax reduce the commercial-law profit of a GmbH?
Yes, under commercial law, trade tax (Gewerbesteuer) qualifies as a profit-reducing business expense. For tax purposes, however, the deduction is disallowed for corporations, so the commercial balance sheet and tax balance sheet diverge on this point.
As of: May 2014
Does a default on the purchase price claim due to buyer insolvency reduce the real estate transfer tax?
No. In its ruling of 12 May 2016, the BFH held that a default on the purchase price claim due to the buyer's insolvency does not result in any adjustment of the assessment basis for the real estate transfer tax. The tax remains based on the originally agreed purchase price.
As of: October 2016
At what values must assets be recognised in the inventory?
As a rule, assets must be valued individually at their (amortised) acquisition or production cost. Incidental costs such as transport, commissioning or financing costs must also be taken into account. For inventories, simplified methods such as LIFO, FIFO or the weighted average method under Section 240 (3) and (4) HGB are permissible under German commercial law.
As of: November 2023
In a voluntary disclosure, do taxes also have to be paid for time-barred years?
Under current law, a voluntary disclosure does not require back payment of taxes for years that are already time-barred. This rule is politically criticised, and there are calls to tighten it so that back payments would also become due for time-barred periods.
As of: February 2014
Will child benefit (Kindergeld) have to be applied for electronically in the future?
Under the revised § 67 sentence 1 EStG, electronic application will become the standard. It must be submitted using the officially prescribed dataset via the officially prescribed interface; a simple email is no longer sufficient. However, paper applications remain permissible.
As of: December 2024
Does the company bicycle actually have to be used for business purposes?
No, for the tax privilege it is irrelevant whether the bicycle is actually used for business trips (e.g. client visits). The only decisive factor is that the employer provides the bicycle to the employee and also permits private use.
As of: November 2012
Must actual manipulation be proven against the taxpayer?
No. Under BFH case law, it is sufficient for rejecting the cash register records that the system merely allows for manipulation. Specific proof of actual manipulation by the taxpayer is not required. Thus, the abstract technical vulnerability of the cash register system alone is enough to establish the tax office's authority to estimate.
As of: April 2017
Does the employer have to consent to a request for parental leave?
In principle, the employer's consent is no longer required. An exception applies to the third block of parental leave between the child's completed 3rd and 8th year of age — here the employer may refuse on urgent operational grounds. The written notice period is seven weeks for leave up to the 3rd birthday and 13 weeks for leave starting after the 3rd birthday.
As of: January 2015
Must the purchase agreement between employer and employee withstand an arm's length comparison?
According to the BFH, no arm's length comparison is required in this constellation. Employer and employee form a natural community of interests in which both sides safeguard their economic interests. A private personal relationship that would render a symbolic purchase price suspicious is generally not present.
As of: February 2023
Does the 2021 child bonus need to be applied for separately?
No, the 2021 child bonus does not need to be applied for separately. It is paid out automatically by the responsible Familienkasse (family benefits office) to recipients of Kindergeld (child benefit). For children born in 2021, the regular Kindergeld application is sufficient.
As of: March 2021
Does the official benefit-in-kind value for breakfast have to be applied if the employer only provides bread rolls and coffee?
No, the official benefit-in-kind value for breakfast does not need to be applied. According to BFH case law, this does not constitute a meal, so no taxable monetary benefit arises. Providing such items is considered a courtesy related to the design of the workplace.
As of: October 2019
Must the decision on flat-rate taxation be made uniformly for all promotional giveaways?
No. The employer may assess each low-value benefit in kind up to EUR 10 separately and decide individually whether to apply flat-rate taxation. A uniform treatment of all promotional giveaways is not required.
As of: August 2016
Must health promotion benefits be provided in addition to regular wages?
Yes. The tax exemption under § 3 Nr. 34 EStG requires that the benefits be granted in addition to the wages owed anyway. Converting existing gross wages into tax-free prevention benefits is therefore not eligible.
As of: August 2016
Does the inflation compensation bonus need to be reported in the tax return or on the income tax certificate?
No, the tax-free IAP does not have to be reported either on the income tax certificate (Lohnsteuerbescheinigung) or in the income tax return. It is also not subject to the progression clause (Progressionsvorbehalt), so there is no risk of a subsequent increase in your income tax burden.
As of: January 2023
Must the meal be served in one's own apartment to qualify for the tax benefit?
No. According to the view of the Fiscal Court of Baden-Württemberg, the tax benefit may also apply if the meal is served in a communal dining hall. The decisive factor is that the service is provided within the spatial area of the taxpayer's household — this also includes communal facilities of the residential home.
As of: September 2012
Does the Neustarthilfe (restart aid) have to be repaid?
The payment is initially made as an advance. After the end of the funding period (30 June 2021), the actual revenues generated must be reported. If revenue during the funding period is no more than 40% of the reference revenue, the advance may be retained in full. If revenues exceed this threshold, a proportional repayment is required.
As of: March 2021
Does the rent still have to be split when operating equipment is leased along with the property?
No. Following the ECJ ruling (EU:C:2023:372) and the subsequent BFH decision, the splitting requirement no longer applies if the leasing of operating equipment constitutes an ancillary service to the principal service (leasing of land/building) between the same contracting parties. In that case, there is a single economic supply that may be exempt from VAT in its entirety.
As of: September 2023
Does private use of a company car need to be taxed if the employer has prohibited it?
No. In its ruling VI R 71/12, the BFH confirmed that no monetary benefit for private use is to be recognized if the employer has expressly prohibited the private use of the company car. In such cases, the tax office may not assume and tax private use on a flat-rate basis.
As of: March 2014
Does the special VAT prepayment (1/11) still have to be paid?
No, the special VAT prepayment of 1/11 for the permanent filing extension does not currently have to be paid. The one-month filing extension will still be granted. Amounts already paid can be refunded upon informal application to the tax office.
As of: March 2020
Does insurance have to pay for fire damage caused by an unattended Advent wreath?
No. In cases of gross negligence, the insurer may refuse payment or reduce it substantially. In the case decided by the OLG Düsseldorf, the insurer's liability was denied entirely because the policyholder left the candles burning unattended while having dinner in the kitchen.
As of: November 2012
Does the caregiver have to pay tax on the travel expense reimbursement received?
No, the travel expense reimbursement is considered a pure expense allowance and not income. It is therefore not taxable for the caregiver. For the taxpayer, two-thirds of the travel expenses are nevertheless deductible as Sonderausgaben (special expenses), provided a proper record with date and route is available.
As of: May 2022
Must a logbook be kept for the entire calendar year?
Yes. According to the BFH ruling of 20 March 2014 (Az. VI R 35/12), a logbook is only recognised for tax purposes if it is kept without gaps for the entire assessment period. A logbook started only during the year is not sufficient to apply the logbook method instead of the 1% rule.
As of: July 2014
Must a managing director set aside funds to settle future tax liabilities?
Yes. Under settled BFH case law, the managing director is obliged, until his removal from office, to keep sufficient funds available to settle tax liabilities that have already arisen or are foreseeable. A breach of this duty to ensure adequate funds (Mittelvorsorgepflicht) may constitute a culpable violation of duty, triggering personal liability under §§ 34, 69 AO.
As of: November 2014
Must a cyclist without a helmet accept contributory negligence in case of an accident?
According to a ruling by the OLG Schleswig-Holstein dated 5 June 2013, a cyclist who collides with a third party acting in breach of traffic regulations on public roads and suffers head injuries must generally accept contributory negligence if no bicycle helmet was worn. The court reasoned that the injured party failed to take protective measures for their own safety.
As of: September 2013
Is an expert appraisal required to quantify disability-related conversion costs?
No, according to the FG Baden-Württemberg, an expert appraisal allocating costs between disability-related and other components is not required. The court considered splitting a single construction project into individual expense items to be impractical.
As of: May 2015
Must there be a temporal connection between the habilitation and the employment relationship?
A close temporal connection between completing the habilitation and starting an employment relationship is not required. It is sufficient if the habilitation is beneficial for the subsequent professional appointment or activity. This establishes the necessary causal link to employment income.
As of: August 2022
Must a credit note explicitly be labelled as 'Gutschrift' since 1 January 2013?
Yes, since 1 January 2013 the explicit designation as 'Gutschrift' has been a mandatory VAT component. The former practice of heading a credit note with 'Rechnung' (invoice) is no longer sufficient. If this designation is missing, a formal defect exists.
As of: December 2012
Does a corporation without planned profit distributions have to carry out the KiStAM query?
No, corporations that do not intend to distribute profits can skip the KiStAM retrieval procedure. Since no investment income is paid out, no capital gains tax — and therefore no church tax on it — is incurred.
As of: September 2016
Is a logbook required for a pure workshop vehicle?
No. According to the BFH, vehicles that typically serve almost exclusively for the transport of goods do not require a logbook. The BFH assumes that such vehicles are generally not used privately.
As of: September 2016
Does the 1% rule have to be applied to every company car held as business property?
In principle, yes: if several cars are part of the business property, the tax authorities require the 1% rule to be applied to each vehicle. In case of doubt, the taxpayer must credibly demonstrate that private use is virtually excluded. Only then can the recognition of private use be omitted.
As of: November 2012
Did employees previously have to prove a specific loss in cases of wage arrears?
Before the introduction of the statutory late payment lump sum, employees could only assert claims for compensation if they could quantify a specific loss, such as reminder fees or charges from returned direct debits. Without concrete evidence, there was practically no leverage against the employer.
As of: July 2016
Are taxpayers using cash-basis accounting required to keep a cash book?
Taxpayers who determine their profit by cash-basis accounting (Einnahmen-Überschussrechnung) under § 4 Abs. 3 EStG are generally not required to keep a cash book. Nevertheless, business income must remain fully and accurately traceable at all times and verifiable by the tax office. In practice, orderly documentation of cash receipts is therefore recommended.
As of: August 2013
Do parents need to file an objection against their income tax assessment in order to benefit from a possible refund?
No, an objection is not required. With regard to the child tax allowances (Kinderfreibeträge), income tax assessments are automatically issued on a provisional basis pursuant to § 165 AO. Should the Bundesverfassungsgericht rule in favor of taxpayers, the affected assessments will be amended ex officio.
As of: December 2016
Do recipients of EU funds still have to maintain interest-bearing bank accounts?
No. Starting in 2013, the obligation to open dedicated interest-bearing bank accounts no longer applies. Interest earned no longer has to be returned to the EU budget and does not count as project income. This implements a long-standing demand, particularly from the research sector and NGOs.
As of: November 2012
Must heirs show that the deceased previously applied for the holiday compensation claim?
No. The ECJ has expressly clarified that the financial compensation does not depend on whether the deceased employee had previously filed a corresponding application for leave or compensation. The entitlement exists irrespective of any such application.
As of: July 2014
Do small businesses (Kleinunternehmer) have to issue and receive e-invoices from 2025?
Small businesses (Kleinunternehmer) are exempt from the obligation to issue e-invoices. However, they must be able to receive e-invoices. In addition, § 34a UStDV introduced a simplified invoicing rule specifically for small businesses, which should not be confused with the rules for low-value invoices (Kleinbetragsrechnungen).
As of: December 2024