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 28 / 47
What planning consequences arise from the ruling for anticipated succession?
Heirs who wish to transfer a tax-exempt family home to their children should only do so after the ten-year retention period has expired in order to avoid retroactive taxation. A reserved usufruct also does not protect against the retroactive loss of the tax exemption. Since the appeal was admitted, comparable cases should be kept open and further case law monitored.
As of: November 2016
What are the basic requirements for the refund of foreign input VAT?
The applicant must be an entrepreneur and must not have carried out any taxable transactions in the refunding state (except for certain reverse-charge cases). The foreign VAT must be shown on a proper invoice, and minimum amounts as well as application deadlines apply, which vary by country. Within the EU, applications are submitted electronically via the BZSt portal.
As of: March 2013
What reasons led to the draft of the 2022 Tax Relief Act (Steuerentlastungsgesetz 2022)?
The background is the sharply rising cost of living, particularly in the energy sector, as a result of inflation, supply bottlenecks caused by the Corona pandemic, and the Ukraine-Russia conflict. The aim is to provide relief especially for low-income groups while simultaneously reducing the administrative burden on the tax authorities.
As of: March 2022
What liability rules previously applied in the terms and conditions of dry cleaners?
Previously, the terms and conditions stipulated that dry cleaners were liable without limit for the loss of clothing, up to its current market value. For damage, liability was limited to intent and gross negligence; in cases of slight negligence, it was capped at 15 times the cleaning charge.
As of: July 2013
What is the recommended course of action for warrants threatening to become worthless?
If it is foreseeable that warrants will expire worthless in 2020, they should be sold at a loss during 2019. Only in this way will the tax office recognise the loss for tax purposes and allow it to be offset against other investment income. A worthless expiry in 2020 would be irrelevant for tax purposes.
As of: October 2019
Which skilled trades sector recorded the most insolvencies in 2013?
In 2013, the majority of skilled trades insolvencies occurred in the main and finishing construction sector. However, this sector's share of total insolvencies in the skilled trades declined from 57.1% in 2012 to 54.3% in 2013.
As of: August 2014
Which references must appear on an invoice under the margin scheme pursuant to § 25a UStG?
Depending on the case, the invoice must state "Gebrauchtgegenstände/Sonderregelung" (second-hand goods/special scheme), "Kunstgegenstände/Sonderregelung" (works of art/special scheme) or "Sammlungsstücke und Antiquitäten/Sonderregelung" (collectors' items and antiques/special scheme). These references are mandatory; without them, the invoice is not compliant and no input VAT deduction is possible.
As of: September 2013
Which hotel services are subject to the reduced VAT rate of 7%?
The reduced rate of 7% applies exclusively to services directly related to the rental or accommodation provided by the hotelier. Ancillary services such as breakfast, use of fitness and sauna facilities, and the provision of parking spaces are not eligible and must be taxed at 19%.
As of: July 2016
What are the maximum amounts for the extended loss carryback under § 10d EStG?
The extended loss carryback has been prolonged to cover the 2022 and 2023 assessment periods. The maximum amounts are EUR 10 million for individual assessment and EUR 20 million for joint assessment. The original maximum amounts of EUR 1 million and EUR 2 million respectively will only apply again from the 2024 assessment period onwards.
As of: June 2022
What is the maximum deductible amount for a home office?
If no other suitable workspace is available for certain professional activities, expenses for a home office can be deducted up to EUR 1,250 per year. If, however, the home office constitutes the center of the entire professional activity, the costs are fully deductible.
As of: October 2016
Which indicators point to bogus self-employment?
Typical indicators include working for only one client, fixed working hours, performing the work on the client's premises, and carrying out the same tasks as the client's employees. Further signs against genuine self-employment are prior employment with the same client or integration into the client's internal processes.
As of: September 2016
What information duties do online traders have under Art. 14 of the ODR Regulation?
Traders established in the EU that conclude online sales or service contracts must place an easily accessible link to the EU Commission's ODR platform on their website. In addition, an email address must be provided. This obligation also applies to online marketplaces.
As of: January 2016
What reporting obligations do inpatient care facilities have under the Care Reorientation Act (Pflege-Neuausrichtungsgesetz)?
Inpatient care facilities must inform the regional associations of the long-term care funds immediately after each routine inspection about how medical, specialist medical, dental, and pharmaceutical care is organized within the facility. The aim is to provide greater transparency for those in need of care and their relatives when selecting a suitable facility.
As of: December 2013
What disclosure obligations does the party required to withhold tax have toward recipients of capital gains?
The party required to withhold tax must inform its recipients of capital gains in writing or in another suitable form, in due time before the regular or event-based query, about the upcoming data retrieval from the BZSt. The notice must also point out the right to object to the transmission of religious affiliation (Sperrvermerk). This information enables the recipient to apply for a Sperrvermerk in good time.
As of: August 2014
What should an emergency folder contain?
Typical components include personal data and contacts, an overview of assets including bank accounts and real estate, insurance documents, directives and powers of attorney (will, advance healthcare directive, precautionary and banking powers of attorney), medical history, and business-related information. The exact scope depends on individual circumstances, for example whether you are a private individual or a business owner.
As of: February 2021
Which inventory methods are permitted under the HGB (German Commercial Code)?
Three methods are permitted: the balance sheet date inventory within 10 days before or after the reporting date, the time-shifted inventory up to three months before or two months after the reporting date with value adjustment pursuant to § 241 Abs. 3 HGB, and the perpetual inventory based on warehouse accounting. For the perpetual inventory, stock levels must be checked regularly and verified for accuracy.
As of: November 2023
Which firm was recognized as an excellent employer by the Steuerberaterverband Westfalen-Lippe in 2022?
In 2022, Steffen & Partner was awarded the "Excellent Employer" seal. The recognition was granted by the Steuerberaterverband Westfalen-Lippe as part of the nationwide initiative of the German tax advisor associations.
As of: January 2022
Which corporations are required to perform the KiStAM query?
In principle, all corporations planning to distribute profits to their shareholders must conduct the regular query. The query determines whether the shareholders are subject to church tax, so that church tax on capital gains tax can be properly withheld. If no distribution is planned, there is no obligation to query.
As of: September 2016
Which communication channels with the tax office remain permissible for Steuerberater (German Certified Tax Advisors) and attorneys?
Steuerberater and attorneys may only communicate with the tax authorities via the ELSTER system or the ERiC interface. Other electronic transmission channels are generally excluded.
As of: December 2024
What are the terms of the KfW quick loan for solo self-employed individuals and small businesses?
The KfW quick loan is also available to solo self-employed individuals and companies with up to 10 employees. Through the principal bank, up to EUR 300,000 can be applied for, depending on 2019 revenue. The federal government assumes the full risk and releases the principal banks from liability.
As of: November 2020
What are the terms of the Neustarthilfe Plus, and can it be combined with the Überbrückungshilfe III Plus?
The Neustarthilfe Plus is aimed at solo self-employed individuals, cooperatives, and comparable applicants. The maximum reimbursement is €4,500 and corresponds to 50% of revenue compared with the reference period. Neustarthilfe Plus and Überbrückungshilfe III Plus cannot be applied for in parallel.
As of: October 2021
What are the consequences of incorrect documentary evidence for an EU supply?
If the accounting and documentary records are not properly maintained, the tax office may deny the VAT exemption for the intra-Community supply. The supply will then be retroactively subject to German VAT, which can result in substantial back payments.
As of: October 2013
What is the consequence of paying maintenance in cash from 2025 onwards?
If maintenance is paid in cash from 2025 onwards, it is no longer deductible for tax purposes as an extraordinary expense (außergewöhnliche Belastung). The taxpayer thus loses the tax benefit, even if the payment can be verifiably proven.
As of: December 2024
What are the consequences of failing to comply with the requirements for electronic invoices?
Violations of the archiving and documentation obligations can result in fines. For example, simply printing out an invoice received by email and processing it as a paper document is considered a violation. In addition, the input VAT deduction may be jeopardized if the basic requirements are not met.
As of: November 2012
What are the consequences of submitting the property tax assessment return late?
Late submission may trigger late-filing surcharges under § 152 AO (at least EUR 25 per month commenced) as well as coercive fines (at least EUR 200). In addition, the tax office may impose an unfavorable estimated assessment, while the filing obligation remains in place despite the estimate. In most federal states, taxpayers in default first receive a reminder letter.
As of: February 2023
What consequences arise from the BFH ruling for driving schools?
Driving schools must invoice their services for obtaining driving licence classes B and C1 with 19% VAT and disclose the tax on their invoices. They cannot rely on a VAT exemption under national law or the EU VAT Directive (MwStSystRL). In return, driving schools are entitled to deduct input VAT on incoming supplies.
As of: August 2019
What are the implications of the BFH ruling IX R 14/12 for owners of vacant properties?
Owners of vacant residential properties must actively document their rental strategy and demonstrably adjust it during prolonged vacancies. Recommended measures include documented rent reductions, engagement of real estate agents, and changes to marketing channels. Without such adjustments, there is a risk that excess income-related expenses will be retroactively disallowed.
As of: February 2013
Which costs of a company car leased through the employer can the employee deduct for tax purposes?
Only additional costs borne by the employee personally are deductible, such as a pro-rata share of fuel expenses attributable to business-related trips. According to current fiscal court case law, the lease installments themselves are not deductible if they are financed via salary conversion.
As of: June 2016
Which work clothing expenses are deductible as income-related expenses?
Deductible items include the acquisition costs of typical occupational clothing as well as cleaning and repair expenses. When purchasing, buying from a specialist retailer is recommended to substantiate the professional nature of the clothing. Damage to private clothing may also be deductible in exceptional cases, provided that the damage demonstrably occurred during work-related activities.
As of: December 2021
Which costs for a home office are deductible and how are they allocated?
Deductible on a pro rata basis are rent, utilities (electricity, water, gas), cleaning costs, insurance, waste disposal, chimney sweep fees, property tax, building depreciation (AfA), and financing interest. The allocation is based on the ratio of the home office's square meters to the total living area. Costs that exclusively relate to the home office (e.g. wallpaper, carpets, curtains) are fully deductible. Work equipment is not part of the room costs and is either written off immediately up to EUR 800 (low-value assets) or depreciated over its useful life if above this threshold.
As of: November 2021
Which costs are no longer eligible under Bridging Assistance IV (Überbrückungshilfe IV)?
Compared to Bridging Assistance III Plus, modernization and renovation costs are no longer eligible cost items under Bridging Assistance IV. The remaining eligible fixed cost categories remain largely unchanged.
As of: December 2021
Which costs must be included in the 110-EUR exemption threshold under the BFH ruling of 16 May 2013?
According to the new case law (BFH VI R 94/10 and VI R 7/11), only those costs are to be included that provide an objective benefit to the employee. This covers items the employee can directly consume, e.g. food, beverages and musical performances. Travel costs, room rentals or fees for event organizers no longer count.
As of: October 2013
Which costs must be included in the threshold under the planned new rules?
Unlike before, the threshold is set to include costs for family members as well as overhead costs such as room rentals or fees for event agencies. As a result, the increase to EUR 150 will in many cases be effectively offset.
As of: October 2014
Which costs are included in the EUR 110 threshold for a company event?
All expenses related to the event count toward the allowance, including food and beverages, entertainment, transportation, venue rental, music, entrance tickets, gifts, and planning costs. The total costs are divided by the number of all persons actually present.
As of: December 2019
Which costs are capped at 1,000 euros per month under the dual household rule?
The cap applies to all expenses directly related to the use of the accommodation itself. For a rented apartment, this includes the gross cold rent as well as warm and cold operating costs, including electricity. For an owned apartment, depreciation (AfA) on acquisition or production costs and interest on borrowed funds are subject to the cap, to the extent they relate to the period of use.
As of: June 2019
Which costs qualify as actual business expenses in childminding services?
Deductible business expenses include all costs directly related to childcare, such as activity materials, hygiene products, meals, travel costs, and special childcare insurance. Rental costs for rooms used for childcare can also be claimed. These items are typically reported within a cash-basis income statement (Einnahmenüberschussrechnung).
As of: July 2021
Which cost categories of a golf tournament fall under the deduction ban of § 4 Abs. 5 S. 1 Nr. 4 EStG?
The deduction ban covers in particular green fees and course booking fees, hospitality costs for participants, and small gifts in kind to the players. All of these expenses qualify as expenditures for purposes similar to hunting, fishing, or sailing/motor yachts and are therefore not tax-deductible.
As of: August 2016
Which cost components of a tradesperson's invoice are eligible under § 35a EStG?
Only labor costs as well as machine and travel costs are eligible. Material costs are excluded from the tax reduction and must be shown separately on the invoice so that the labor portion is clearly identifiable.
As of: December 2022
Which medical expenses qualify as außergewöhnliche Belastungen (extraordinary burdens)?
Qualifying expenses include, among others, self-paid medication with a doctor's prescription as well as co-payments on medical bills. The key requirement is medical necessity, which is typically evidenced by a prescription or written medical order. These costs are only deductible to the extent that they exceed the zumutbare Eigenbelastung (reasonable personal contribution threshold).
As of: September 2013
What criteria must a home office meet for tax purposes?
The home office must be integrated into the domestic sphere, used primarily for intellectual, written, or organizational work, and used at least 90% for business purposes. It must be separated from the rest of the living area by a door and walls — curtains are not sufficient (BFH VIII R 10/12). A 'work corner' in the living room or a walk-through room is not recognized, nor is a room containing private items such as a television or wardrobe.
As of: November 2021
Which criteria do the Familienkasse and the courts examine regarding the relationship between training and employment?
The review focuses in particular on the time ratio between training hours and working hours, and on whether the child is already using the qualifications acquired in the first stage through the employment. The contractual ties to the employer are also taken into account. If the time criterion remains neutral, the other indicators can be decisive in determining whether the employment takes precedence over the training.
As of: June 2023
Which criteria does the tax court apply when assessing 'another workplace'?
The tax court examines whether the available workplace is qualitatively suitable for the specific tasks to be performed. Decisive factors are the actual equipment and the temporal availability. If essential work tools such as printer, scanner or the necessary technical literature are missing, the workplace is deemed insufficient, and a home office is recognized for tax purposes (FG Rheinland-Pfalz, judgment of 07.09.2016, Az. 1 K 2571/14).
As of: October 2016
Which criteria are decisive for being awarded the “Digitale Kanzlei” seal?
The key factors are, in particular, the firm’s overall digitization rate, the digitization rate in the banking area, the share of digital receipts, the number of postings per hour, and the digitization rate of transaction data. This evaluates both the firm’s overall digital workflow and its digitization in accounting specifically.
As of: July 2019
Which criteria are decisive in determining whether a celebration is professionally motivated?
The key factors are the occasion of the celebration, the group of invited guests, and the location and timing of the event. If only work colleagues are invited, the celebration takes place on the employer's premises, and it occurs at least partly during working hours, this indicates a professional motivation.
As of: November 2016
Which criteria suggest dependent employment for fee-based physicians?
The decisive factors are integration into the hospital's work organisation and subjection to instructions (§ 7 Abs. 1 SGB IV). Fee-based physicians predominantly use the hospital's personnel and material resources and work within predefined structures in a division of labour — for example, as part of the surgical team or as a ward physician. They generally have no independent entrepreneurial scope for decision-making.
As of: June 2019
Which criteria indicate dependent employment of a hospital physician?
Key criteria include integration into the hospital's work organization, use of hospital equipment without own operating resources, inclusion in ward and shift schedules, and working in a team with nursing staff and other physicians. A fixed hourly wage and the absence of entrepreneurial risk also indicate dependent employment.
As of: August 2017
Which criteria argue against permanent separation despite living apart?
Factors indicating that spouses are not permanently separated include regular joint activities such as outings, vacations, or weekend events, shared life planning (e.g., a planned reunion), and the absence of other partners. Joint contributions to costs for children and shared activities also support the assumption of an ongoing personal and economic partnership.
As of: March 2017
Which criteria argue against a professional occasion for a mixed celebration?
Factors that argue against a professional occasion include, in particular, an individual selection of the invited colleagues, a predominance of private guests over colleagues, and the fact that a private event such as a birthday is being celebrated together with the colleagues. After weighing these circumstances, the celebration may be classified as privately motivated overall.
As of: April 2015
Which services from the service charge statement are tax-privileged under § 35a EStG?
Tax-privileged services include in particular household-related services such as stairwell cleaning, snow removal, and garden maintenance (§ 35a Abs. 2 EStG), as well as tradesman services such as the functional inspection of smoke detectors (§ 35a Abs. 3 EStG). The prerequisite is a close connection to the running of the household and that the service is performed within the taxpayer's home.
As of: August 2023
Which benefits do artists receive through the Künstlersozialversicherung?
Through the KSK, around 190,000 self-employed artists and publicists are subject to mandatory coverage under the statutory health, long-term care and pension insurance. They are entitled to the full statutory benefits catalogue of these branches of social insurance. This provides them with protection similar to that of regular employees.
As of: August 2019