Questions & Answers
Answers to common questions.
Curated from our articles on tax advisory, statutory audit and legal services — alphabetical, filtered by audience or topic.
For you as…
Topics
2304 questions · Page 2 / 47
At what thresholds does a business qualify as a medium-sized enterprise?
For tax purposes, a business is classified as a medium-sized enterprise if its revenue exceeds EUR 900,000 or its taxable profit exceeds EUR 56,000. This classification is relevant for the frequency of tax audits. On average, medium-sized enterprises are audited every 15.2 years.
As of: August 2013
From what number of employees onwards is the payroll test waived for inheritance tax purposes?
For companies with up to five employees, the payroll test (Lohnsummenprüfung) is waived when granting the inheritance and gift tax exemption. Seasonal workers are not included when determining the number of employees. This rule is intended to reduce bureaucracy for small businesses.
As of: June 2016
From what profit threshold is electronic filing of the income tax return mandatory?
Under the EStG, electronic filing of the income tax return is mandatory as soon as profits from business income (e.g. self-employment, trade or business, or agriculture and forestry) exceed 410 euros per year. Even modest profits of around 500 euros already trigger this obligation.
As of: September 2015
From what amount is it worthwhile to register income-related expenses as a tax allowance?
Registration is only an option if the income-related expenses exceed the employee lump-sum allowance of EUR 1,000 per year, as this amount is already taken into account automatically. Only the portion exceeding this threshold can be entered as a tax allowance on the income tax card.
As of: November 2014
From what amount will rental income be taxable in the future?
Under the planned Wachstumschancengesetz (Growth Opportunities Act), income from renting and leasing will only be taxed once it exceeds €1,000 per calendar year. Up to this exemption threshold, the income remains tax-free. If the threshold is exceeded, the entire income is taxable.
As of: December 2023
From how many employees does the payroll rule apply under the inheritance tax reform?
The payroll rule already applies to companies with more than five employees; previously, the threshold was twenty employees. For 6 to 10 employees, 250% of the initial payroll must be reached within five years (or 500% within seven years); for 11 to 15 employees, 300% (565%); and for more than 15 employees, 400% (700%).
As of: October 2016
Who handles questions about motor vehicle tax for periods up to 2014?
Questions regarding motor vehicle tax for periods up to and including 30 June 2014 must still be directed to the previously competent tax office (Finanzamt). Only for periods from 1 July 2014 onwards is the customs administration (Zollverwaltung) the point of contact. Jurisdiction therefore depends on the tax period concerned.
As of: January 2014
When were the negotiations in the Mediation Committee adjourned to?
The negotiations between the federal government and the states on the inheritance tax reform in the Mediation Committee were adjourned to 21 September 2016. No agreement had been reached at that point.
As of: September 2016
On what legal basis does the BGH ground the invalidity of a severance exclusion?
The BGH relies on § 241 No. 4 AktG, which is applied by analogy to the GmbH. Under this provision, resolutions and articles of association that violate public policy are void. An exclusion of severance payments is deemed contrary to public policy because it infringes upon the shareholder's fundamental membership rights.
As of: July 2014
On what legal basis does the ECJ ground the inheritability of holiday entitlement?
The ECJ bases its decision on the European Working Time Directive, which provides for financial compensation for unused leave under certain conditions. National rules or practices under which holiday entitlement expires without compensation upon the employee's death are incompatible with EU law.
As of: July 2014
To what amount is the employee lump-sum allowance (Arbeitnehmer-Pauschbetrag) raised by the 2022 Tax Relief Act (Steuerentlastungsgesetz 2022)?
The employee lump-sum allowance is raised from €1,000 to €1,200 per calendar year. The increase is to apply retroactively as of 01/01/2022 and results in a reduction of the income tax burden for employees.
As of: March 2022
What was the additional earnings threshold for early retirees raised to in 2020?
Due to the coronavirus crisis, the annual additional earnings threshold for early retirees was raised to EUR 44,590 until the end of 2020. This was intended to allow early retirees to support systemically relevant sectors without a pension reduction.
As of: March 2020
What data basis underlies the Kienbaum study on managing director compensation?
The study analyzes the compensation of a total of 1,294 managing directors from 704 German companies. It is therefore considered one of the more comprehensive surveys on managing director remuneration in Germany.
As of: November 2014
On what legal basis was the Corona Emergency Program for consulting costs established?
The BMWi (Federal Ministry for Economic Affairs and Energy) had supplemented its existing framework directive on the promotion of entrepreneurial know-how with a Corona module, thereby creating an emergency program. Implementation was handled by the Federal Office for Economic Affairs and Export Control (BAFA) with support from the DIHK coordination office.
As of: March 2020
What is the legal basis for the voluntary self-disclosure with exemption from penalty?
The voluntary self-disclosure leading to exemption from penalty is governed by § 371 AO (German Fiscal Code). It is a unique provision under German law that allows taxpayers to obtain immunity from prosecution despite a completed tax evasion. The requirements are full subsequent disclosure of the evaded taxes and payment of the outstanding amounts, including interest and, where applicable, penalty surcharges.
As of: July 2014
What is the legal basis for the reporting obligation to the Transparency Register?
The reporting obligation arises from sections 18 et seq. of the German Anti-Money Laundering Act (Geldwäschegesetz, GwG). It concerns information on beneficial owners and must be fulfilled, free of charge, vis-à-vis the official Transparency Register.
As of: January 2020
On which provision is the transfer of the EUR 40 threshold to gifts to third parties based?
The simplification is based on an analogy to R 19.6 LStR 2011, which provides preferential treatment for non-cash benefits to employees up to EUR 40 as mere courtesies. This wage tax rule is extended via the circular of the OFD Frankfurt to gifts made by the taxpayer to third parties within the scope of § 37b EStG.
As of: August 2013
Which BFH case can be cited in the appeal?
In the appeal, reference can be made to the case pending before the Bundesfinanzhof (BFH) under file number IX R 31/13. That case addresses whether the interest rate of 6% per year on tax arrears remains lawful in light of the current low market interest rates.
As of: February 2014
Which BMF circular forms the basis for the electronic transmission of donation receipts?
The relevant authority is the BMF circular dated 6 February 2017, reference IV C 4 – S 2223/07/0012 (DOK 2016/1033014). It provides that non-profit organisations may freely choose the form in which donation confirmations are transmitted.
As of: February 2017
Which three components must a certified TSE consist of?
A TSE consists of a security module that logs all entries and secures them in a tamper-proof manner, a storage medium for retaining the individual records throughout the statutory retention period, and a digital interface (DSFinV-K) for data transfer during audits. To date, only solutions using a MicroSD card with adapter have been certified; cloud-based solutions are not yet certified.
As of: September 2020
Does the freedom to choose the operating room exempt a fee-based physician from mandatory social insurance?
No. Even if a physician does not attend team meetings and is free to choose the operating room, this is not sufficient to establish self-employed status. The decisive factor is the overall assessment, in particular the integration into hospital operations and the absence of entrepreneurial risk.
As of: August 2017
Does failing to wear a bicycle helmet constitute contributory negligence in accidents?
No. According to the BGH ruling of 17 June 2014 (Az. VI ZR 281/13), a cyclist who is involved in an accident through no fault of their own cannot be held contributorily negligent for not wearing a helmet. The prerequisite is that, at the time of the accident, neither a statutory helmet requirement nor a corresponding general public awareness existed.
As of: June 2014
Which tax types generate the highest additional assessments in tax audits?
The highest additional results from tax audits typically arise from corporate income tax (Körperschaftsteuer) and trade tax (Gewerbesteuer). According to the 2012 statistics, additional assessments amounted to approximately EUR 5.13 billion for corporate income tax and around EUR 4.03 billion for trade tax. VAT (Umsatzsteuer) was comparatively low at EUR 1.9 billion.
As of: August 2013
Is there entitlement to child benefit during a short-term illness-related interruption of training?
Yes. In the event of an illness-related interruption of vocational training, entitlement to child benefit under § 32 Abs. 4 S. 1 Nr. 2 a EStG remains in place as long as the illness is not expected to last longer than six months. In this case, it is sufficient that the training position continues to exist and the child intends to resume training, even if no training activities are currently being carried out.
As of: May 2022
For EU cases, is the entitlement limited to differential child benefit only?
No, the entitlement is not limited to differential child benefit if Germany has primary jurisdiction. If one parent is gainfully employed in Germany and no separate child benefit entitlement exists in the home country (e.g. Bulgaria), the full German child benefit is paid. The order of jurisdiction is governed by EC Regulation 883/2004.
As of: February 2021
Is there a legal right to defer inheritance tax in cases of business succession?
For acquisitions due to death, a legal right to an unconditional, interest-free deferral of up to ten years is being introduced. The prerequisite is compliance with the payroll rule and the retention periods. The deferral applies to the tax attributable to the privileged assets and is intended to safeguard the existence of businesses.
As of: June 2016
Does a municipal duty to grit also apply during nighttime hours?
Generally no. According to BGH case law, municipalities are typically only required to grit from around 6:00 a.m. in the event of nighttime ice formation. A preventive duty to grit during nighttime hours exists only as an exception, namely where significant traffic is to be expected at certain locations.
As of: November 2012
Is there a statutory helmet requirement for cyclists in Germany?
There is no general statutory helmet requirement for cyclists in Germany. However, the Higher Regional Court of Schleswig-Holstein has effectively introduced an indirect helmet obligation through its contributory negligence case law, as cyclists without a helmet must expect their claims to be reduced in the event of head injuries.
As of: September 2013
Until when may non-upgradable cash register systems continue to be used?
Cash register systems acquired between 25/11/2010 and 01/01/2020 that cannot be retrofitted with a TSE (technical security device) due to their design may continue to be used until 31/12/2022. This exception does not apply to PC-based registers or app-based systems. Older registers (acquired before 25/11/2010) had to be replaced by 01/01/2020. The non-upgradability must be confirmed by the manufacturer and included in the procedural documentation.
As of: September 2020
Until when does the reduced VAT rate of 7% apply in the hospitality sector?
The reduced VAT rate of 7% on restaurant and catering services has been extended until 31 December 2022. Beverages are excluded and remain subject to the standard rate of 19%. The extension was granted because the hospitality sector, due to lockdown restrictions, could not sufficiently benefit from the reduction originally limited to June 2021.
As of: March 2021
Until when does the home-office flat rate apply, and what is its amount?
The home-office flat rate has been extended until 31 December 2022. Employees without a home office room may claim a flat rate of EUR 5 for each full day worked from home, up to a maximum of EUR 600 per calendar year. The flat rate is not available if expenses for a home office room are claimed in the same assessment period.
As of: June 2022
Until when does the old property tax calculation remain in effect?
The Bundesverfassungsgericht (Federal Constitutional Court) has provided for a transitional period: the previous calculation method may continue to be applied until 31 December 2024. From 1 January 2025 onwards, the new rules must be applied on a mandatory basis.
As of: August 2019
Until when does the increased commuter allowance from the 21st kilometre apply?
The increase of the distance allowance from the 21st kilometre onwards is limited until 31 December 2026. After that, the previous uniform rate of EUR 0.30 per kilometre of distance could apply again, unless a further statutory extension is enacted.
As of: March 2020
Until when does the transitional rule for the entry certificate (Gelangensbestätigung) under the BMF circular dated 16 September 2013 apply?
For intra-Community supplies carried out up to 31 December 2013, the tax authorities will not object if the accounting and documentary evidence is still maintained in accordance with the legal framework in force until 31 December 2011. Only for supplies from 1 January 2014 onwards must the new evidentiary requirements be applied without exception.
As of: October 2013
By when does the Federal Court of Auditors consider a complete abolition of the Soli feasible?
According to the Federal Commissioner for Efficiency in Public Administration (BWV), a complete phase-out of the solidarity surcharge would be possible by the end of the new financial planning period in 2023. This would also be compatible with the debt rule, provided that corresponding planning reserves are included in the 2019–2023 financial plan.
As of: June 2019
By when must the application to waive profit intention be submitted?
For existing installations commissioned before 01.01.2022, the application can be filed until the end of 2022. For new installations from 01.01.2022 onwards, the application can be submitted in the year following commissioning. For installations commissioned before 01.01.2004, the application is only possible after the 20-year EEG funding period has expired.
As of: January 2022
By when can the Neustarthilfe (restart aid) be applied for and who is eligible to file the application?
The funding period covers 01/01/2021 to 06/30/2021. Applications can be submitted until 08/31/2021 at the latest, and exclusively via an examining third party such as a Steuerberater (German Certified Tax Advisor). Each applicant may file only one application for Neustarthilfe, and a choice must be made between Neustarthilfe and Überbrückungshilfe III (bridging aid III).
As of: March 2021
Until when can Bridging Aid II be applied for, and by whom?
The application deadline runs until 31 January 2021. Applications must be submitted via the portal www.ueberbrueckungshilfe-unternehmen.de by a registered examining third party, i.e. a Steuerberater (German Certified Tax Advisor), Wirtschaftsprüfer (German Statutory Auditor), or sworn auditor. In the final settlement, not only repayments but also additional payments will be possible in future.
As of: November 2020
By when can a property tax abatement for vacant real estate be applied for in respect of 2013?
The application for property tax abatement for 2013 must be filed by 31 March 2014. This deadline is a strict cut-off date; a later application is no longer possible.
As of: March 2014
By when can a change of income tax class be applied for in the current year?
A change of income tax class (Lohnsteuerklasse) for the current calendar year must be applied for at the competent tax office (Finanzamt) by 30 November. After this deadline, a change for the current year is generally no longer possible. The application applies to married couples and partners in a registered civil partnership.
As of: November 2014
Until when can an incorrect invoice be corrected in order to preserve the input VAT deduction?
In its ruling of 20 October 2016 (V R 26/16), the BFH held that corrected invoices may be submitted up until the close of the final oral hearing before the fiscal court. Up to that point, the retroactive input VAT deduction can therefore still be secured.
As of: April 2017
Until when could applications for Überbrückungshilfe II (Bridging Aid II) be submitted?
The application deadline for the second phase of the Überbrückungshilfe (September to December 2020) ended on 31 December 2020. Applications could be filed from 26 October 2020 onwards.
As of: September 2020
What was the application deadline for the NRW special program Digital Retail 2020?
The application deadline was 15 September 2020. Applications could be submitted to Projektträger Jülich (PtJ).
As of: July 2020
Until when could amendment applications for Bridging Aid I (Überbrückungshilfe I) be submitted?
Amendment applications for Bridging Aid I (covering May to August 2020) could be submitted until 30 November 2020, after the original deadline of 30 October 2020 was extended. For applications that had already been decided, a substantiated amendment application can be filed electronically, for example to add eligible costs. Subsequent payments through the final settlement are not provided for; however, actual fixed costs and revenue declines are confirmed in that process.
As of: November 2020
Until when can exemption orders for investment income be filed from 2018 onwards?
From 2018 onwards, exemption orders (Freistellungsaufträge) can generally be filed or amended retroactively until 31 January of the following year. This allows the tax-free allowance to be optimally distributed across multiple bank accounts after the fact. However, each bank decides individually whether to apply this extended deadline, so we recommend checking with the respective bank.
As of: November 2017
Until when can old Dutch VAT IDs be confirmed under Sec. 18e UStG?
Confirmation requests under Sec. 18e UStG for Dutch VAT IDs valid until 31 December 2019 must be submitted to the Bundeszentralamt für Steuern by the end of 2019. From 1 January 2020, confirmation of the old numbers is no longer possible.
As of: January 2020
By when must the application for a property tax remission for 2020 be filed?
The application for a partial remission of property tax (Grundsteuer) for 2020 must be submitted to the relevant municipality or tax office by 31 March 2021. This deadline is a strict cut-off period (Ausschlussfrist).
As of: March 2021
By when must the application for an income tax allowance (Lohnsteuerfreibetrag) be submitted?
The application deadline for the Lohnsteuerfreibetrag has been moved to 1 November of the year preceding the year for which the allowance is to apply. This gives employees a little more time to file their application with the tax office in good time.
As of: December 2024
By when must the exemption application be filed to apply retroactively to 01.10.2022?
The application must be received by the employer no later than 02.01.2023 for the exemption to take effect retroactively to 01.10.2022. However, retroactive exemption from health and long-term care insurance is only possible if no benefits were claimed up to that date.
As of: September 2022
By when must the legislator enact a new property tax regulation?
The legislator was required to enact a constitutionally compliant new property tax regulation by the end of 2019. If no new regulation is adopted by then, the currently applicable rules may no longer be used.
As of: April 2018