Questions & Answers
Answers to common questions.
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2304 questions · Page 16 / 47
When is a full cost deduction for a home office possible?
An unlimited deduction is permitted if the home office constitutes the center of all business and professional activity (§ 4 Abs. 5 Nr. 6b S. 3 EStG). The decisive factors are qualitative: whether the activities that define the profession are carried out there. Where two workplaces are qualitatively equivalent, it depends on whether more than half of the working time is spent in the home office. For teachers, sales representatives, architects, and judges, a center of activity in the home office is ruled out.
As of: November 2021
When is an event-based query permitted instead of the regular annual query?
An event-based query (Anlassabfrage) may only be carried out at the express request of the recipient of investment income, for example in the case of a change of religious affiliation, or upon new circumstances such as newly established shareholder relationships. It ensures that mid-year changes are correctly reflected in the church tax deduction on investment income.
As of: August 2014
When is a book-value transfer between sister partnerships possible?
A transfer of assets between partnerships at book value is possible if the same persons hold interests in both entities (identity of ownership). The new rule implements a directive from the Bundesverfassungsgericht (Federal Constitutional Court) and avoids the disclosure of hidden reserves in such transfers.
As of: December 2024
When does paying relatives for childcare make sense from a tax perspective?
Since the taxpayer can only deduct two-thirds of the costs, while the caregiver must pay tax on the full income, there is regularly a tax gap of one-third. Such compensation makes sense when the caregiver's income remains below the basic tax-free allowance (Grundfreibetrag). In that case, the income stays tax-free and the taxpayer can still deduct two-thirds of the costs.
As of: May 2022
When is a late notification of the pension insurance exemption exceptionally justified?
A late submission is justified if the mini-jobber already receives a full old-age pension and is generally exempt from pension insurance. In these cases, missing the deadline does not delay the effect of the exemption.
As of: September 2022
When does it make sense to outsource ELENA payroll accounting to a Steuerberater?
With a larger number of employees, outsourcing to a Steuerberater (German Certified Tax Advisor) is worthwhile, as manual data entry is very time-consuming and error-prone. Since data was not stored in the form and had to be re-entered every month, the risk of errors grows with the size of the workforce. A professional service provider minimizes both the workload and the liability risk associated with faulty submissions.
As of: December 2010
When is professional advice on gifts and inheritances advisable?
Professional advice is advisable as early as the planning stage of asset transfers, well before the inheritance occurs. A Steuerberater (German Certified Tax Advisor) can optimally coordinate gifting strategies, the use of tax-free allowances, and the choice of tax class. Without professional guidance, you risk avoidable tax burdens that typically far exceed the cost of proper structuring.
As of: July 2008
When is a decision by the Federal Constitutional Court on inheritance tax expected?
A decision by the Federal Constitutional Court was expected in 2013. Should the court overturn the preferential treatment for business assets, a tightening of inheritance and gift tax is to be expected. Until the ruling is announced, however, the existing rules continue to apply.
As of: October 2012
When does § 13b UStG apply to construction services?
§ 13b UStG applies to construction services only if the recipient uses the received construction service to provide its own construction services. Construction services include work deliveries or other services for the creation, repair, maintenance, alteration or removal of structures. Without this direct further use, the supplying entrepreneur remains the party liable for the tax.
As of: June 2014
When can inheritance tax on inherited residential property be deferred?
Upon application, a deferral of up to 10 years is granted if the heir could only pay the inheritance tax by selling the inherited residential property. The deferral rule has been extended to all cases in which real estate is used for residential purposes, including rental after the inheritance and owner-occupied use, regardless of the type of property.
As of: December 2024
When can the enforcement of an inheritance tax assessment be suspended due to constitutional concerns?
Under the BFH decision of 21 November 2013 (II B 46/13), the enforcement of an inheritance tax assessment may be suspended as long as the judicial review proceedings on the constitutionality of the ErbStG are pending before the BVerfG (1 BvL 21/12). The taxpayer must demonstrate a legitimate interest in such suspension. With this ruling, the BFH departed from its previously restrictive case law.
As of: December 2013
When can a university lecturer deduct a home office for tax purposes?
A home office is deductible if the workplace provided by the employer cannot be used to the specifically required extent and in the required manner. This applies, for example, if essential work equipment such as printers, scanners or the necessary specialist literature is missing there. In such cases, expenses of up to EUR 1,250 per year can be claimed as work-related expenses (Werbungskosten).
As of: October 2016
When can a company use the extended trade tax deduction under Section 9 No. 1 Sentence 2 GewStG?
The extended deduction can be claimed upon application if the business exclusively manages and uses its own real estate. In this case, income from real estate management is fully exempt from trade tax. The rule ensures equal treatment with private letting and leasing, which is not subject to trade tax.
As of: March 2023
When can a tax return still be filed on paper despite business income?
Paper filing is only permitted if electronic transmission is unreasonable for the taxpayer (so-called hardship application). According to case law, however, personal concerns about transmitting data via the internet or negative experiences with internet misuse are not sufficient grounds.
As of: September 2015
When can taxing the withdrawal gains be more advantageous than continuing the tax entanglement?
Immediate taxation can be beneficial if the commercial infection (gewerbliche Infizierung) lasted only a few years, so that hidden reserves have barely accumulated. With continued entanglement, the future tax burden tends to increase, and tax advantages such as the extended trade tax deduction or the 10-year speculation period remain unavailable.
As of: October 2023
When can a prepayment penalty be claimed as selling expenses?
If the sale of the property qualifies as a taxable private disposal under § 23 Abs. 1 Nr. 1 EStG (e.g., sale within the 10-year period without continuous owner-occupation), the prepayment penalty can be deducted as selling expenses when determining the gain. It thereby reduces the taxable capital gain from the disposal.
As of: February 2024
Wann kann ich ein häusliches Arbeitszimmer absetzen?
Ob und wie ein häusliches Arbeitszimmer abziehbar ist, hängt von der Nutzung ab. Die Infografik dazu finden Sie im Merkblatt-Verzeichnis unter "Arbeitszimmer ab 2023". (Quelle: Deubner Verlag)
When does the FG Münster reject the deduction for garden remodeling under § 33 EStG?
The FG Münster (judgment of 15 January 2020, 7 K 2740/18 E) ruled that a deduction under § 33 EStG is precluded if a terrace already exists at the rear of the house, thereby providing accessible garden access prior to the remodeling. In that case, the measures are no longer considered unavoidable. A final BFH ruling is still pending, so comparable cases should be kept open.
As of: June 2022
When does an employer have a predominant business interest in covering training costs?
A predominant business interest exists in particular when the employee is required to undergo training under statutory or collective bargaining provisions and the employer needs the qualification for the performance of the work. A typical example is drivers in heavy haulage who must complete regular mandatory training. In such cases, covering the costs primarily serves the business and does not constitute remuneration.
As of: January 2017
When does a voucher qualify as a single-purpose voucher, and what are the VAT consequences?
A single-purpose voucher exists when the VAT due (tax rate and place of supply) is already determined at the time of issuance. VAT is then levied upon issuance of the voucher, while the subsequent redemption is generally irrelevant for VAT purposes. According to the BMF circular of 4 November 2020, however, a document for an item already bindingly ordered with an obligation to accept delivery qualifies as a down payment rather than a single-purpose voucher.
As of: December 2020
When does advertising on an employee's vehicle exceptionally not constitute wages?
Wages are not deemed to arise only if the operational business purpose of the advertising is clearly the primary objective. This requires that the contractual arrangement ensures the promotion of the advertising effect, for example through specific requirements regarding the promotional use of the vehicle as well as provisions on exclusivity or the permissibility of additional third-party advertising.
As of: February 2020
When does a tenant fixture qualify as a sham component (Scheinbestandteil)?
A sham component (Scheinbestandteil) exists when the tenant incorporates an asset into the building only for a temporary purpose. According to BFH case law, three conditions must be met: the ordinary useful life must exceed the actual useful life, removal must be expected based on the circumstances, and at the time of removal the asset must still have a fair value exceeding mere scrap value.
As of: July 2023
When is a child considered part of a single parent's household?
A child belongs to the household if registered at the single parent's address and intended to remain there permanently, or only temporarily absent (e.g. for vocational training or studies). In addition, the single parent must provide for the child's material and emotional well-being. If the child is registered in more than one household, the relief amount goes to the parent who receives the Kindergeld (child benefit).
As of: December 2021
When does a use for own residential purposes within the meaning of § 23 EStG apply?
A qualifying owner-occupied use exists if the property was used exclusively for the owner's own residential purposes between acquisition and sale, or at least in the year of sale and the two preceding calendar years. A sale following a move-out generally does not meet this requirement. As a result, the tax exemption within the 10-year holding period does not apply.
As of: August 2023
When does a classic Betriebsaufspaltung (business split) with trade tax consequences exist?
A Betriebsaufspaltung requires both a substantive and a personal interdependence. Where a corporation acts as the holding entity, it must hold a direct stake of more than 50% in the operating entity. In such cases, the activity qualifies as inherently commercial and precludes the extended trade tax reduction.
As of: June 2024
When does a rental property qualify as a regular place of work?
A regular place of work exists if, based on an overall assessment, the property constitutes the qualitative and quantitative center of the rental income-generating activity. In the case decided by the BFH, 165 and 215 annual trips respectively, together with extensive administrative, maintenance, monitoring, and upkeep activities, supported this conclusion.
As of: April 2016
When does a partial undeclared cash agreement exist?
A partial undeclared cash agreement exists when only a portion of the agreed contract price is officially paid by invoice, while another portion is paid without an invoice and without tax reporting. Such a partial agreement renders the entire works contract void, not just the undeclared portion.
As of: August 2013
When does the tax authority consider studies to be full-time?
According to the BMF circular from 2020, full-time studies exist if the program serves to prepare for a profession and the student does not engage in gainful employment exceeding an average of 20 hours per week. Marginal employment within the meaning of the German Social Code is also permissible.
As of: June 2022
When does a profit-realizing transfer of goodwill occur under BFH ruling X R 32/05?
In its ruling of 13 May 2009 (Az. X R 32/05), the BFH determined the conditions under which goodwill is transferred in a profit-realizing manner. This is particularly relevant when transferring a sole proprietorship to a GmbH, as the goodwill must be disclosed and taxed in the process. The precise delineation has significant income tax consequences for the transferor.
As of: June 2009
When does a gift exist for tax purposes?
A gift is a gratuitous benefit that enriches the recipient without any consideration in return. However, if the benefit is granted as an add-on to a main service and is linked to it within an exchange of services, the gift character is absent. In this case, the deduction restrictions under § 4 Abs. 5 EStG do not apply.
As of: July 2016
When is there no uniform contractual arrangement despite the combination of a purchase and construction contract?
If the original general contractor agreement is amended in material respects after the property purchase contract is concluded, the assumption of a uniform contractual arrangement no longer applies. Material deviations include, for example, changes in floor area or construction costs of more than 10%, or the erection of an additional defining building. In such cases, real estate transfer tax is assessed solely on the value of the land.
As of: January 2018
When does a true credit note exist for VAT purposes?
For VAT purposes, a credit note (Gutschrift) only exists when the recipient of the supply (customer) invoices the supplier for the service rendered, instead of the other way around. Typical examples include settlements with commercial agents, brokers, agencies or commission arrangements, where the principal issues the invoice. This does not apply to mere invoice corrections or cancellations.
As of: August 2013
When is the disability lump-sum allowance more beneficial than the deduction of extraordinary expenses under § 33 EStG?
The lump-sum allowance is granted as an alternative to the deduction of extraordinary expenses under § 33 EStG and applies regardless of the actual costs incurred. It is advantageous when the recurring disability-related expenses do not exceed the reasonable individual burden defined in § 33 Abs. 3 EStG. Non-recurring extraordinary expenses may additionally be claimed as extraordinary expenses alongside the lump-sum allowance.
As of: November 2021
When is declining-balance depreciation worthwhile?
Declining-balance depreciation is particularly advantageous for assets with a longer useful life, as acquisition or production costs have a greater tax impact in the early years. This results in higher depreciation amounts upfront and a liquidity benefit.
As of: October 2020
When must the managing director of a GmbH or AG file for insolvency?
If the company becomes illiquid or over-indebted, the managing director is obliged to file for insolvency without undue delay. Any delay results in personal liability and criminal law risks.
As of: August 2013
When must the KiStAM standard query be carried out?
The standard query for the church tax deduction feature (Kirchensteuerabzugsmerkmal, KiStAM) must be submitted annually between 1 September and 31 October to the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt). The reference date for the shareholders' church tax liability is 31 August of the respective year. The query is a prerequisite for the correct withholding and remittance of church tax on capital gains tax in the following year.
As of: September 2016
When must a managing director seek external advice in a crisis?
As soon as signs of a crisis emerge and the managing director does not personally possess sufficient knowledge to assess illiquidity or over-indebtedness, they must promptly obtain independent professional advice. This follows from the heightened duty of care specified by the BGH in its ruling of 27 March 2012. Any delay may give rise to personal liability.
As of: August 2013
When must the taxpayer decide between the 1% rule and a logbook?
The choice between the two methods must be determined at the start of the assessment period. Anyone wishing to use the logbook method must keep the logbook continuously from 1 January (or from the start of vehicle use) through to the end of the year.
As of: July 2014
When does the tax office assume a unified contract structure?
A unified contract structure exists, among other cases, when the land purchase and construction contracts are linked, a total price has been agreed, construction began before the contract was concluded, or the buyer can no longer freely decide on the type and scope of the building. A de facto obligation to build with a specific construction company also triggers this assumption.
As of: January 2018
When will the Unified EU Patent Court commence operations?
The Unified Patent Court can only begin its work once 13 EU member states have ratified the relevant agreement. Only then will centralized patent granting with EU-wide validity become operationally effective.
As of: August 2013
Wann rutscht eine Immobilien-GmbH in die Gewerblichkeit?
Bei vermögensverwaltenden Immobilien-GmbHs droht unter Umständen die gewerbliche Infektion mit Gewerbesteuerfolgen — worauf zu achten ist, lesen Sie im Beitrag. (Quelle: Deubner Recht & Steuern)
As of: December 2025
When are asbestos remediation costs deductible as extraordinary expenses?
According to the BFH ruling of 29 March 2012 (VI R 47/10), a specific, demonstrable health hazard is required; the general danger posed by asbestos fibres alone is not sufficient. If the hazard originates from a third party, the taxpayer must first enforce their civil law claims for remedy; otherwise, the deduction is denied.
As of: May 2012
When are clothing expenses deductible as typical work clothing?
Clothing expenses are only deductible if they qualify as typical work clothing intended almost exclusively for professional use. Examples include uniforms, official robes, or doctors' coats. Items that can also be worn privately are not deductible.
As of: August 2015
When are training costs deductible as work-related expenses (Werbungskosten)?
A deduction as Werbungskosten is possible for expenses related to a second or further course of training, as well as for an initial training that takes place within an employment relationship. The requirement is a sufficiently specific, objectively verifiable connection with future income. Current income does not yet need to be generated.
As of: February 2020
When are training costs deductible as income-related expenses?
Training costs are deductible as Werbungskosten (income-related expenses) if a completed initial vocational training (lasting at least 12 months and concluded with a final examination) already exists and the further training builds on it, for example a master's degree following a bachelor's. Costs incurred during training under an employment relationship (e.g. a dual study program or apprenticeship with wage payments) are also deductible as Werbungskosten during the initial training, since there is a direct connection with income from employment.
As of: August 2023
When must health insurance bonus payments be recorded for tax purposes?
Recognition follows the cash-flow principle under § 11 Abs. 1 EStG. Cash bonuses are recognized at the time of payment, in-kind bonuses at the time they are issued, and credits to a bonus account at the time they are credited.
As of: March 2023
When are expenses for a home office fully deductible?
Expenses for a home office are only fully deductible if the home office constitutes the centre of all business and professional activity. If the main activity takes place outside the home office – for example, in the case of seminars or lectures – the deduction is capped at EUR 1,250 per year.
As of: April 2015
When are services provided by a nursing home VAT-exempt under § 4 No. 16 UStG?
Services are only exempt if they are closely connected with the care and support of persons in need of assistance and are essential for providing the care service. Additional services that go beyond standard care do not fall under the exemption and are subject to the standard VAT rate.
As of: November 2023
When must rental costs for trade fair stands be added back for trade tax purposes?
An add-back under § 8 No. 1 lit. e GewStG only applies if the trade fair stand would notionally form part of the company's fixed assets. The decisive factor is whether the stand would be intended to serve the business operations on a lasting basis (§ 247 Abs. 2 HGB). If the stand is only rented occasionally and trade fair participation is not strictly necessary for distribution, no add-back applies.
As of: July 2022
When are pension and insurance contributions deductible as special expenses despite tax-exempt foreign income?
Pension and insurance contributions may exceptionally be deducted if the related income is earned in the EU, the EEA, or Switzerland, is tax-exempt domestically under a double taxation treaty, and the state of employment does not allow any tax recognition of these expenses. The new development is that this exception no longer applies only to employee income, but also to pension income or income from self-employed professional activity. The rule applies to all open cases.
As of: December 2024