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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Are business expenses related to tax-exempt PV systems deductible?
Due to the tax exemption of income and withdrawals, the deduction of business expenses is also excluded under § 3c Abs. 1 EStG. For privately operated PV systems, however, costs for repair or maintenance work may be claimed as household-related tradesman services under § 35a EStG to reduce tax. Special rules apply to PV systems within a business not exclusively focused on electricity generation, where a deduction of business expenses remains possible in certain constellations.
As of: August 2023
Are clearance costs for a inherited house deductible as estate liabilities?
No. According to the ruling of the Finanzgericht (Tax Court) of 18 December 2014 (Az. 7 K 1377/14), clearance costs for a house belonging to the estate do not qualify as deductible estate liabilities within the meaning of § 10 Abs. 5 ErbStG. Instead, they constitute non-deductible costs of estate administration.
As of: May 2015
Are income taxes from a retroactive business closure by heirs deductible as estate liabilities?
No. According to the BFH ruling of 10 May 2023 (II R 3/21), income taxes on a closure gain arising from a business closure declared by the heirs under § 16 Abs. 3b S. 3 EStG cannot be deducted as estate liabilities under § 10 Abs. 5 Nr. 1 ErbStG. The decisive factor is that the tax-triggering event was not realised by the decedent, but by the heirs themselves.
As of: October 2023
Are travel expenses for childcare deductible even without remuneration?
Yes. The BFH ruled in 1998 (III R 94/96) that travel expenses are deductible as special expenses under § 10 Abs. 1 Nr. 5 EStG. According to the Fiscal Court of Baden-Württemberg, this applies even if the caregiver receives no remuneration. A flat rate of €0.30 per kilometer of distance may be applied.
As of: May 2022
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
Are tradesman services performed in an external workshop eligible for tax relief under § 35a EStG?
No. Tradesman services qualify for tax relief under § 35a Abs. 3 EStG only if they are performed within the spatial and functional area of the taxpayer's household. If the service is carried out in the tradesman's workshop, the tax reduction does not apply. The Finanzgericht Rheinland-Pfalz confirmed this in its ruling of 06.07.2016 (Az. 1 K 1252/16).
As of: August 2016
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 freelance doctors working in hospitals subject to social security contributions?
Yes. Under the BSG ruling of 4 June 2019 (B 12 R 11/18 R), freelance doctors working in a hospital are generally classified as dependent employees and are therefore subject to mandatory social security contributions. Self-employed status applies only in atypical exceptional cases. The decisive factor is their integration into the hospital's work organisation.
As of: June 2019
Sind Höhe von Säumniszuschlägen und Aussetzungszinsen rechtmäßig?
Die gesetzliche Höhe von Säumniszuschlägen und Aussetzungszinsen ist umstritten — den Verfahrensstand und die Fundstelle finden Sie im Beitrag. (Quelle: Deubner Recht & Steuern)
As of: December 2025
Are the costs of a party celebrating a milestone birthday and a professional examination partially deductible as work-related expenses?
No. In its ruling of 19 March 2014 (Az. 1 K 3541/12), the Finanzgericht Baden-Württemberg held that the expenses for a celebration with a dual occasion are entirely privately motivated if a private event such as a milestone birthday is also being celebrated. In such cases, the costs cannot be split into a professional and a private portion.
As of: April 2015
Are the costs of a post-divorce settlement agreement tax-deductible?
No, according to the Fiscal Court of Münster, costs for a post-divorce settlement agreement (Scheidungsfolgenvereinbarung) are not deductible as extraordinary expenses. Such costs are not unavoidable, since the agreement can also be reached out of court. Even under previous case law, these costs were not deductible.
As of: December 2014
Are the costs of arbitration proceedings deductible as extraordinary expenses?
According to the ruling of the FG Düsseldorf dated 08.08.2013 (11 K 3540/12), costs of arbitration proceedings can be deducted as extraordinary expenses within the meaning of § 33 EStG. The court considered the arbitration procedure to be a preliminary stage to civil litigation and therefore deemed the expenses unavoidable. However, an appeal to the BFH was permitted, so a final ruling by the highest court is still pending.
As of: December 2013
Are costs for kitchen, bathroom, and hallway as ancillary rooms of a home office deductible?
No. If ancillary rooms such as the kitchen, bathroom, or hallway are part of the domestic sphere and used to a not insignificant extent for private purposes, the proportional expenses cannot be deducted as business expenses or income-related expenses. This applies even if the home office itself is recognized for tax purposes.
As of: June 2016
Are costs for kitchen, bathroom and hallway deductible as part of a home office?
No. In its ruling of 17 February 2016 (Az. X R 26/13), the BFH held that expenses for rooms also used to a significant extent for private purposes are not deductible as business expenses or income-related expenses. This applies even if the household includes a home office that is recognised for tax purposes.
As of: August 2016
Are the costs of meals in a residential care home deductible as household-related services?
Yes. The Finanzgericht Baden-Württemberg ruled on 12 September 2012 (Az. 3 K 3887/11) that residents of a care home may claim the proportionate labour costs for preparing and serving meals as household-related services under § 35a EStG. A prerequisite is that the care home's invoice itemises these costs accordingly.
As of: September 2012
Are the costs of converting a shower for disabled access deductible as extraordinary expenses?
Yes, expenses for converting a home shower for disabled access can be claimed in full as extraordinary expenses under § 33 EStG. The Tax Court of Baden-Württemberg confirmed this in a final judgment dated 19 March 2014 (Az. 1 K 3301/12). The prerequisite is that the modification is necessary due to the disability.
As of: May 2015
Are pet care costs tax-deductible?
Yes. According to the ruling of the Düsseldorf Tax Court of 4 February 2015 (Az. 15 K 1779/14 E), expenses for the care of a pet living in the household can be claimed as household-related services. The court thereby contradicts the previous view of the tax authorities, which excluded such costs. Upon application, the income tax is reduced by 20% of the expenses, up to a maximum of EUR 4,000 per year.
As of: April 2015
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 the costs of completely renewing a fitted kitchen in a rental property immediately deductible?
No. According to the BFH ruling of 3 August 2016 (IX R 14/15), the expenses for the complete renewal of a fitted kitchen do not constitute immediately deductible maintenance expenses. They must be claimed as income-related expenses on rental income via depreciation (AfA) over a useful life of ten years.
As of: December 2016
Are the costs of a first-time degree deductible as business expenses or income-related expenses?
No. Expenses for initial vocational training or a first-time degree that also constitutes an initial qualification are generally not deductible as business expenses or as income-related expenses. They may only be claimed as special expenses (Sonderausgaben) up to the statutory maximum amount.
As of: February 2014
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 personal trainer costs tax-deductible for professional athletes?
According to the ruling of the FG Rheinland-Pfalz dated 18 July 2014 (Az. 1 K 1490/12), expenses for a personal trainer are not deductible as income-related expenses, even for a professional footballer. In the court's view, a clear separation between professional and private use is not possible.
As of: November 2014
Are the costs of converting your own home to be accessible for people with disabilities deductible as an extraordinary expense?
Yes, expenses for the disability-accessible conversion of a home can be claimed as an extraordinary expense (außergewöhnliche Belastung) under § 33 EStG, insofar as they are not reimbursed by third parties (e.g., the long-term care insurance fund). However, the deduction is generally only available in the year the expenses are actually paid. If the costs do not have their full tax effect in that year, they cannot be carried forward to subsequent years.
As of: August 2015
Are costs for a Polish care service deductible as extraordinary expenses?
Yes, costs for in-home care provided by a foreign care service can be claimed as extraordinary expenses under § 33 EStG. According to the ruling of the FG Baden-Württemberg (21.06.2016, 5 K 2714/15), this applies even if the staff are not trained nursing professionals and the service is not officially recognized under German social law. The prerequisite is that the care serves to alleviate the illness.
As of: November 2016
Are services provided by a medical cost-sharing association exempt from VAT?
Services provided by a cost-sharing association, such as the provision of medical facilities, equipment or practice rooms, are exempt from VAT under § 4 No. 14 lit. d UStG. However, this requires that the services are rendered exclusively to the members (participants). Services to non-members, by contrast, are subject to VAT.
As of: April 2016
Are massage services provided by the employer recognized as tax-free health promotion?
According to the Tax Court of Bremen, pure massage services generally do not fall under the tax exemption pursuant to § 3 Nr. 34 EStG. It is not readily apparent to what extent massages serve to improve the general state of health. A tax exemption is therefore typically ruled out in such cases.
As of: August 2016
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 minority shareholder-managing directors of a GmbH subject to social security contributions?
As a rule, yes. Shareholders holding less than 50% of a GmbH are deemed to be dependently employed and are therefore subject to mandatory social security contributions. Exceptions are only possible if the articles of association contain provisions ensuring sufficient freedom from instructions.
As of: January 2017
Are mini-jobbers subject to mandatory pension insurance from 2013 onwards?
Yes, from 2013 onwards mini-jobbers are generally subject to mandatory pension insurance. The mini-jobber's own contribution amounts to 4.6 percent (14.6 percent in private households), while the employer continues to pay a flat rate of 15 percent. This measure is intended to counteract the risk of old-age poverty.
As of: September 2012
Are estate liabilities deductible under limited inheritance tax liability?
Yes, in cases of limited tax liability, estate liabilities will be deductible on a pro rata basis. The deduction corresponds to the share of the asset acquisition subject to German inheritance tax.
As of: December 2024
Are late-payment interest charges of 6% per year constitutional according to the BFH?
Yes. In its ruling of 01.07.2014 (Az. IX R 31/13), the BFH held that the statutory interest rate of 0.5 percent per month (6 percent per year) is not unconstitutional. The court therefore did not refer the matter to the Federal Constitutional Court for a specific judicial review.
As of: September 2014
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 repair costs after misfuelling deductible as work-related expenses?
No. The Bundesfinanzhof ruled in case VI R 29/13 that repair costs resulting from misfuelling on the way to work are not additionally deductible as work-related expenses. Such costs are deemed covered by the commuter allowance (Entfernungspauschale), even where they amounted to around EUR 4,200 in the specific case.
As of: November 2014
Are divorce costs deductible as an extraordinary burden?
According to a ruling by the Münster Tax Court dated 21 November 2014 (Az. 4 K 1829/14 E), divorce proceedings costs remain deductible as an extraordinary burden even under the revised § 33 Abs. 2 Satz 4 EStG applicable from 2013 onward. The court reasoned that a marriage can only be dissolved through court proceedings, making these costs unavoidable. An appeal to the BFH has been admitted, so the final legal position remains open.
As of: December 2014
Are a shoe saleswoman's shoes deductible as work-related expenses?
No. In its judgment of 1 July 2015 (case no. 9 K 3675/14 E), the Münster Tax Court ruled that the costs of acquiring shoes for a shoe saleswoman are not deductible as work-related expenses, even if the employer requires her to wear the company's own shoe models. Shoes are considered everyday clothing, the costs of which are attributable to private living expenses.
As of: August 2015
Are tax advisory fees for a voluntary self-disclosure deductible as income-related expenses?
The Cologne Tax Court ruled on 17 April 2013 (Az. 7 K 244/12) that tax advisory fees of approximately €11,000 incurred in connection with a voluntary self-disclosure relating to capital income up to 2008 are deductible as income-related expenses in the year of payment (2010). In addition, the saver's lump-sum allowance could be claimed. However, the decision is not yet final, as the tax office has filed an appeal with the BFH.
As of: March 2014
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 criminal defense costs deductible as extraordinary expenses?
No. In its ruling of 16 April 2013 (Az. IX R 5/12), the BFH held that criminal defense costs incurred in connection with a conviction for an intentional offense are not deductible as extraordinary expenses under § 33 EStG. The reasoning: committing an intentional crime does not constitute an unavoidable event.
As of: September 2013
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 VAT prepayments for December deductible in the old year if paid in January?
Yes. VAT prepayments qualify as regularly recurring expenses and can be allocated to the previous year as a business expense if they are paid within a short period after year-end. A short period is defined as up to 10 days after the end of the calendar year.
As of: October 2018
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 moving expenses also tax-deductible for private relocations?
For purely private relocations, no deduction as work-related expenses is possible; however, household-related services under § 35a EStG can be claimed. Eligible costs include labour and travel expenses of, for example, a moving company or tradesperson, but not material costs. The tax reduction amounts to 20 percent of the expenses, capped at EUR 4,000 per year on a maximum of EUR 20,000 in eligible expenses.
As of: July 2019
Are accident costs on the commute to work deductible as work-related expenses?
Yes, traffic accidents involving a private car on the route between home and the first place of work are generally considered work-related. The resulting accident costs can therefore be claimed as work-related expenses (Werbungskosten) under income from employment. This applies in addition to the commuting allowance (Entfernungspauschale) for extraordinary expenses.
As of: August 2013
Are promotional calendars with a company logo tax-deductible advertising costs or gifts?
According to the ruling of the FG Baden-Württemberg (12.4.16, 6 K 2005/11), providing high-value promotional calendars free of charge to identifiable recipients does not qualify as an advertising measure but as a gift within the meaning of §4 Abs. 5 EStG. The imprinted company logo is not considered consideration provided by the recipient. As a result, the strict rules for gifts to business associates apply.
As of: July 2016
Are advertising activities for a shopping center harmful to asset management status?
No, advertising and sales-promotion activities do not necessarily result in classification as a commercial enterprise. Since the advertising promotes the entire shopping center, it predominantly serves the landlord's interest. The leasing service therefore continues to define the overall exchange of services.
As of: January 2017
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 currency losses from the liquidation of a foreign subordinate partnership deductible for trade tax purposes?
No. According to the BFH ruling of 02 December 2015, currency losses from the liquidation of a foreign subordinate partnership do not reduce the domestic trade earnings of the German parent partnership. Only income from domestic permanent establishments is subject to trade tax.
As of: April 2016