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 15 / 47
When will the exchanged financial account data reach the German tax offices?
The international data is initially collected and reviewed by the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt). Forwarding to the local tax offices is not expected before 2019. Only then will the tax offices be able to use the data specifically for assessments and audits.
As of: September 2017
When does German energy tax apply to fuel purchased abroad within the EU?
German energy tax is generally levied whenever diesel is brought from another European country into Germany. This is intended to ensure taxation of fuel consumed domestically. For example, if a truck is refueled in the Netherlands and subsequently crosses the German border, the taxable event is generally triggered.
As of: July 2013
When does January 10 fall on a weekend again?
For the first time again in January 2021. In this case, the BFH case law applies, meaning that VAT prepayments can still be allocated to the previous year even if paid only on the following business day.
As of: October 2018
When does granting a pension commitment result in taxable wages?
According to settled BFH case law, the mere granting of a pension commitment does not yet constitute an inflow of wages. An inflow only occurs when pension benefits are actually paid out or when the employee directly receives an economic benefit.
As of: November 2016
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 integrated care lead to commercial infection of a joint medical practice?
If a joint medical practice receives flat-rate case fees under integrated care that cover not only medical treatment but also the supply of pharmaceuticals and medical aids, a commercial component arises. According to the tax authorities (OFD Frankfurt/Main, ruling dated 16.08.2016), this commercial component infects all income of the joint practice, so that the entire activity qualifies as a commercial business.
As of: March 2017
When do a GmbH's loss carryforwards expire upon a share sale?
Under § 8c KStG, loss carryforwards expire pro rata if more than 25% of the shares are transferred to a single acquirer within a five-year period. If more than 50% of the shares are transferred, the loss carryforward is forfeited in full. This rule also applies to interest carryforwards and other loss items.
As of: December 2017
When does a property belong to a company's assets for real estate transfer tax purposes?
A property belongs to the assets of the company that most recently realized a basic taxable event under § 1 Abs. 1 GrEStG (e.g. a purchase agreement) concerning the property. This attribution applies as long as the acquisition has not been reversed. The statutory definition clarifies which company a property is to be attributed to for real estate transfer tax purposes.
As of: December 2024
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 German VAT apply to shipments to private customers in the EU?
For deliveries to private individuals (end consumers) in other EU countries, the place of supply is generally the point of departure of the goods. Therefore, if goods are shipped from Germany, German VAT must be charged and remitted. This applies as long as the relevant delivery threshold of the destination country is not exceeded.
As of: April 2016
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 cash book report considered proper?
According to the BFH, a cash book report is proper if the daily takings can be derived consistently from the documented opening and closing cash balances. The records must be accurate, complete, and verifiable. Where these requirements are met, an estimate by the tax office is not permissible.
As of: August 2013
When is a PC-based cash register system considered vulnerable to manipulation?
A PC-based cash register system is already considered vulnerable to manipulation if subsequent changes can be made without traceability – regardless of whether only IT specialists or even ordinary users could carry out such manipulations. The Fiscal Court of Münster (judgment of 29.03.2017, Az. 7 K 3675/13) clarified that a system based on Microsoft Access does not meet this requirement either. The decisive factor is the abstract possibility of manipulation, not whether manipulation actually occurred.
As of: April 2017
When is a relocation considered job-related?
A job-related reason exists if the move is connected to a change of workplace, for example when starting a career, relocating the company headquarters, or changing employers. A job-related reason is also recognized if the daily commuting time between home and the primary place of work is reduced by at least one hour. In this case, a change of city is not required, so moves within the same city may also qualify.
As of: July 2019
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 is a company considered an "undertaking in difficulty" and therefore not eligible to apply?
Under Art. 2 No. 18 of Regulation (EU) No. 651/2014, this applies if, in the case of limited liability companies (e.g. GmbH, UG, founded before 31.12.2016), more than half of the share capital has been lost due to accumulated losses; if, in the case of partnerships (KG, OHG), more than half of the equity capital has been lost; if insolvency proceedings are pending or the conditions for such proceedings are met; or if rescue aid has not yet been repaid or restructuring aid is still ongoing. If any of these conditions applied as of 31.12.2019, the subsidy may not be requested.
As of: March 2020
When is a company classified as a large enterprise for tax audit purposes?
A company qualifies as a large enterprise (Großbetrieb) if its annual turnover exceeds EUR 7.5 million or its taxable profit exceeds EUR 280,000. Large enterprises face significantly closer scrutiny by the tax authorities and are audited, on average, every 4.6 years.
As of: August 2013
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 is an eBay seller considered an entrepreneur for VAT purposes?
An eBay seller is classified as an entrepreneur if they act on a sustained basis with the intention of generating income. Indicators include a high number of sales, long-term activity, and regular revenues of significant amounts. In the case decided, annual revenues ranged between 18,000 and 66,000 euros, which established entrepreneurial status.
As of: May 2015
When is a tax assessment notice made available for retrieval deemed to have been served?
An administrative act made available electronically for retrieval is deemed served on the fourth day after its provision. This reflects the extended presumption of receipt introduced by the Postrechtsmodernisierungsgesetz (Postal Law Modernization Act). The person entitled to retrieval is notified electronically on the day of provision about the retrieval option and its legal effects.
As of: December 2024
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
When does the tax exemption under § 3 Nr. 11 EStG apply to death benefits?
According to the BFH, a tax exemption under § 3 Nr. 11 EStG is only available for dependants in need of support. For heirs who are not in need of support, by contrast, the civil-service death benefit is fully taxable.
As of: September 2021
When is a GmbH managing director personally liable for the company's tax debts?
Under §§ 34, 69 AO, the managing director, as the legal representative, is personally liable if he or she culpably (intentionally or through gross negligence) breaches tax obligations, resulting in unpaid tax claims. Personal liability therefore requires not merely the non-payment of taxes, but specific fault on the part of the managing director. Tax authorities frequently invoke this liability to pursue outstanding tax debts against the representative.
As of: November 2014
When is a municipality liable for a black ice accident on a residential street?
A municipality can only be held liable if the accident occurred within the designated clearing and gritting hours and the municipality breached its duty to maintain traffic safety. If the accident happens outside these hours – for example, at 4:30 a.m. – claims for damages and compensation for pain and suffering are generally excluded.
As of: November 2012
When did the German Federal Constitutional Court rule on inheritance and gift tax?
The German Federal Constitutional Court issued its ruling on inheritance and gift tax on 17 December 2014. The decision provided legal clarity regarding tax relief for the transfer of business assets.
As of: December 2014
When did the BFH ease the requirements for the address on invoices?
In two rulings dated 21 June 2018, the BFH held that stating a postal address at which the supplying business can be reached is sufficient. This relaxed the previously strict requirements imposed by the tax authorities regarding invoice details.
As of: August 2018
When did the Bundestag pass the Inheritance Tax Reform Act?
The grand coalition reached a compromise on the reform of inheritance tax on 20 June 2016. The Bundestag passed the corresponding act on 24 June 2016.
As of: September 2016
When is the prohibition on deducting income-related expenses under the flat-rate withholding tax considered unconstitutional by the Tax Court?
The Tax Court of Baden-Württemberg considers the absolute deduction prohibition unconstitutional if the taxpayer's personal income tax rate is already below 25% when only the saver's lump-sum allowance is applied, and actual income-related expenses are higher. In such cases, the prohibition results in an unreasonable disadvantage compared to the flat-rate withholding tax rate.
As of: February 2013
When is the BFH bound by the factual findings of the tax court regarding corporate burial?
As the court of revision, the BFH is generally bound by the factual findings and their assessment by the tax court, provided that no procedural errors or violations of the laws of logic are raised. If the tax court evaluates the evidence to the effect that no corporate burial exists – for instance because liability assets were preserved – the BFH cannot readily overturn this finding.
As of: November 2014
When is the gain from the sale of a property tax-free under § 23 EStG?
The capital gain is tax-free if the property was used exclusively for personal residential purposes between acquisition/completion and sale, or if it was used for personal residential purposes in the year of sale and the two preceding calendar years. Outside these cases, a sale within the 10-year speculation period is taxable as a private sale transaction.
As of: July 2023
When is the gain from the sale of a private property subject to tax?
For rented properties held as private assets, the capital gain is taxable if less than ten years lie between acquisition and sale. This so-called ten-year speculation period generally does not apply to owner-occupied private properties, whose sale is usually tax-free.
As of: July 2017
When is electricity from a photovoltaic system tax-free?
If the generated solar power is used exclusively for personal consumption and not sold, no taxable income arises. However, in this case the option to reclaim input VAT on acquisition, maintenance, and repairs from the tax office is also forfeited.
As of: June 2021
When is input VAT deduction permitted for company events?
Input VAT deduction is only possible if the goods or services received are predominantly in the employer's business interest. According to the tax authorities, this is the case when the benefits qualify as minor gifts (Aufmerksamkeiten) within the meaning of § 3 Abs. 9a Nr. 2 UStG and therefore do not constitute a taxable supply to the employee.
As of: August 2023
When are deductible expenses for rental income limited to the commuter allowance?
According to the BFH ruling of 01.12.2015 (IX R 18/15), the deduction is limited to the commuter allowance (Entfernungspauschale) if the rental property constitutes the fixed center of a rental activity designed for sustained income generation. In this case, the property qualifies as a regular place of activity, and only the one-way distance may be claimed.
As of: April 2016
When is the reduced tax rate more favorable than the Fünftelregelung (one-fifth rule)?
The reduced tax rate under § 34 Abs. 3 EStG is generally more advantageous when there is a high capital gain and the taxpayer already earns regular income at the top tax rate. In the example with EUR 200,000 in capital gains and EUR 50,000 in regular income, the savings amount to approximately EUR 40,970 compared with the Fünftelregelung. The Fünftelregelung, by contrast, is more favorable with lower regular income or when the reduced rate has already been used in prior years.
As of: June 2023
When is the economic benefit from a statutory health insurance practice license regarded as a separate asset?
According to BFH case law, a separate intangible asset exists only if the statutory health insurance practice license alone is the subject of the purchase agreement and not an entire medical practice. Only in this case can the purchase price be depreciated as a depreciable asset over its useful life.
As of: May 2017
When is the co-leasing of operating equipment a VAT-exempt ancillary service?
An ancillary service exists when the operating equipment is specifically tailored to the building and serves exclusively the optimal contractual use. In the decided case, feeding, heating, and ventilation systems of a turkey barn qualified as ancillary services to the barn lease. The decisive factor is the economic unity of the overall service.
As of: September 2023
When is flat-rate taxation under Section 37b EStG relevant for gifts?
For gifts to business partners exceeding the EUR 10 threshold, the giver may assume the tax at a flat rate of 30%, plus solidarity surcharge and church tax. This keeps the gift tax-free for the recipient. However, the flat-rate tax itself is not deductible as a business expense if the gift exceeds the EUR 35 limit.
As of: July 2013
When is the tax-class combination IV/IV more favorable than III/V?
If the monthly wage of the lower-earning spouse exceeds the threshold amounts shown in the BMF tables (columns 2, 3, 5 or 6), the IV/IV combination generally results in a lower – or at least no higher – wage tax burden than III/V. The tables differentiate according to whether each spouse is covered by all or none of the branches of social insurance, and they apply only if the annual wage remains constant.
As of: May 2022
When is the inheritance tax exemption denied due to administrative assets?
If non-privileged administrative assets exceed 90% of total business assets, the exemption from inheritance and gift tax is denied entirely. Administrative assets of up to 10%, by contrast, are treated as tax-privileged business assets. In addition, financial means of up to 15% may be allocated to the privileged assets to secure liquidity.
As of: June 2016
When is a book value approach for contributed business assets not possible?
A book value approach is not possible if, taking into account withdrawals and contributions during the retroactive period, negative acquisition costs would result. In this case, the book values of the contributed assets must be stepped up to the extent necessary to avoid negative acquisition costs.
As of: December 2024
When is an annual wage tax adjustment by the employer excluded starting in 2024?
Retroactively from 1 January 2024, the annual wage tax adjustment is excluded if the employee receives foreign income from which no domestic wage tax was withheld. It is also excluded if, within the standard pension allowance (Vorsorgepauschale), different long-term care insurance deduction rates were applied for the employee during the adjustment year, in order to prevent an incorrect annual wage tax calculation.
As of: December 2024
When can a Minijob alongside a main job benefit from preferential tax and social security treatment?
Only if the Minijob is performed for a different employer. Section 8 (2) sentence 1 SGB IV expressly permits a low-paid Minijob alongside main employment subject to social security contributions only with different employers. With the same employer, all jobs are aggregated.
As of: February 2023
When is a business exempt from the OSS procedure (de minimis threshold)?
Exempt are businesses established in only one EU member state whose net total of intra-Community distance sales and telecommunications, broadcasting, television and electronic services does not exceed €10,000 in either the current or the preceding calendar year. In this case, invoices must be issued with domestic VAT and reported to the competent tax office.
As of: June 2021
When is a loss from renting out a holiday apartment recognised for tax purposes?
A loss is recognised, among other conditions, if the actual rental period falls short of the locally customary rental period for holiday apartments by no more than 25%. If this threshold is exceeded, the tax office examines the intention to generate income separately and typically requires a 30-year surplus forecast.
As of: January 2021
When is a private sale of real estate tax-free?
Under § 23 Abs. 1 Nr. 1 Satz 3 EStG, a capital gain on the sale of real estate is tax-free if the property was used exclusively for the owner's own residential purposes between acquisition and sale, or in the year of sale and the two preceding years. Use by dependent children eligible under § 32 EStG is treated as equivalent to owner-occupation.
As of: October 2023