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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Which legal forms may opt for corporate taxation?
Eligible to apply are partnerships under § 25 UmwStG, i.e. OHG, KG, GmbH & Co. KG and Partnerschaftsgesellschaften. The GbR is excluded from the option. In addition, at least 75% of the partners must approve the change of legal form by shareholder resolution pursuant to § 217 Abs. 1 UmwG.
As of: July 2021
Welche Rechtsfrage hat der BFH dem EuGH zur Behandlung der Arzneimittel-Abschläge vorgelegt?
Der BFH (Beschluss vom 22.06.2016, V R 42/15) hat dem EuGH die Frage vorgelegt, ob die unterschiedliche umsatzsteuerliche Behandlung der Preisabschläge gegenüber gesetzlichen und privaten Krankenversicherungen mit dem Unionsrecht vereinbar ist. Nach Auffassung des BFH gibt es keine objektive Rechtfertigung für die abweichende Beurteilung, da nach der EU-Grundrechtecharta vergleichbare Sachverhalte gleich zu behandeln sind.
As of: August 2016
What legal question did the IV. Senate of the BFH refer to the Grand Senate?
The IV. Senate referred the question of whether the extended trade tax deduction for real estate (erweiterte Grundstückskürzung) must also be denied to a property-managing entity that qualifies as commercial solely due to its legal form, if it holds an interest in a purely asset-managing partnership that is not deemed commercial. The key issue is whether real estate held via the lower-tier partnership qualifies as "own real estate" of the upper-tier entity.
As of: November 2016
Which legal basis permits a shorter depreciation period for buildings?
Section 7 (4) sentence 2 EStG allows taxpayers to apply a shorter actual useful life instead of the flat-rate depreciation rates under Section 7 (4) Nos. 1 and 2 EStG. The burden of proof lies with the taxpayer, who typically meets this requirement by submitting an expert appraisal.
As of: March 2023
Which legal basis governs the deduction of a home office?
The relevant provision is § 4 Abs. 5 Satz 1 Nr. 6b Satz 2 EStG. Under this rule, expenses for a home office are deductible up to €1,250 per year if no other workplace is available for the business or professional activity. The BFH now interprets the provision on a person-related basis.
As of: March 2017
What is the legal situation for the home office (häusliches Arbeitszimmer) following the Annual Tax Act 2022?
The Annual Tax Act 2022 amended § 4 Abs. 5 Satz 1 Nr. 6b EStG. Since then, a deduction of income-related expenses for a home office is also possible based on a statutory annual lump sum. The ruling of the FG Berlin-Brandenburg was issued under the previous legal framework, but its principles regarding medical necessity remain relevant as an interpretive guide.
As of: January 2023
Welche Reisekosten kann ich geltend machen?
Fahrtkosten, Verpflegungspauschalen und Übernachtung lassen sich als Reisekosten ansetzen. Die Infografik finden Sie im Merkblatt-Verzeichnis unter "Reisekosten". (Quelle: Deubner Verlag)
Which incidental travel expenses can truck drivers claim when sleeping in the vehicle?
Eligible incidental travel expenses include, in particular, fees for the use of sanitary facilities (toilets, showers, and washrooms) at rest stops, as well as expenses for cleaning the driver's own sleeper cab. These costs can be claimed in addition to the standard meal allowances.
As of: December 2012
What are the risks of paying a Corona bonus to a controlling shareholder-managing director?
The tax office examines whether the payment is at arm's length or motivated by the shareholder relationship. If a shareholder-related motivation is assumed, a hidden profit distribution arises, which increases the GmbH's taxable income and must be taxed as investment income at the shareholder level. Payment is only advisable if a non-shareholding managing director would receive a comparable bonus.
As of: September 2020
What are the risks of disregarding the obligation to pay the artists' social security contribution?
Companies that use services subject to the contribution without registering with the Künstlersozialkasse must expect back payments in the course of the social security audit. Between 2015 and 2019, intensified audit and advisory activities by the German pension insurance and the KSK led to the registration of around 80,000 newly identified contribution-liable companies. An early review of the contribution obligation is therefore strongly recommended.
As of: August 2019
What are the risks of repaying a shareholder loan before insolvency?
If a company has repaid a shareholder loan prior to insolvency, the insolvency administrator may, under certain conditions, contest the repayment. This applies even if the company was not yet in a crisis at the time of repayment. Caution is therefore advised when making such repayments, particularly during economically strained periods.
As of: December 2020
What risks arise from incorrect ELENA reports submitted by the employer?
If the employer submits incorrect information, employees may receive sickness or unemployment benefits in the wrong amount. Typing errors are particularly likely with manual online data entry, as the data is not stored in the form but must be re-entered each month. In addition, the question of liability for incorrect submissions had not been conclusively resolved.
As of: December 2010
What are the risks of opening the fake BFH email?
Downloading the attached file may install malware (e.g. trojans or ransomware) on your computer. This can lead to sensitive data being spied on or systems being encrypted. Attachments in such emails should therefore not be opened under any circumstances.
As of: October 2016
What risks does the client bear in an undeclared-work arrangement?
The client loses all contractual warranty rights. If defects occur, the client cannot demand subsequent performance, damages, or repayment. In addition, tax-related and regulatory consequences may arise due to participation in undeclared work.
As of: August 2013
What role do clients play in a firm's quality management?
Clients are at the center of all services provided by a firm. The firm analysis and its implementation primarily serve to ensure clients' quality expectations are met on a lasting basis. Quality management is therefore not an end in itself, but a tool for consistent client orientation.
As of: March 1997
What role do practical skills play in the recognition of foreign healthcare professions?
The recognition procedure places particular emphasis on assessing practical skills. The examinations include, for instance, a patient presentation. This ensures that foreign-trained professionals meet the technical requirements for practising their profession in Germany.
As of: December 2013
What role does IT security play in digital collaboration with the Steuerberater (German Certified Tax Advisor)?
IT security is critical, as sensitive financial and personnel data are exchanged electronically between client and firm. We recommend that the IT officers on both sides jointly align data transmission paths, interfaces, and protective measures. Compliant data retention under GoBD must also be taken into account.
As of: March 2017
What role does artificial intelligence play in tax advisory services?
AI is increasingly becoming an important tool in tax advisory work and requires targeted staff training. It complements professional expertise but does not replace the ongoing analysis of legislative changes and individual client situations. Firms that integrate AI early on can design their processes more efficiently.
As of: June 2024
What role does appreciation play in the succession process?
Appreciation is a decisive factor in building the successor's motivation and commitment to the company. Transferring responsibilities and decision-making authority signals trust in the successor. Without this appreciation, there is a heightened risk that the designated successor will withdraw or fail to manage the transition successfully.
As of: April 2015
What role does the BMF circular on the recognition of electronic bank statements play?
The BMF circular defines the specific conditions under which electronically transmitted bank statements are recognized as accounting documents. It governs requirements regarding authenticity, integrity, and audit-proof storage of the data, thereby providing legal certainty for companies that rely on electronic banking.
As of: September 2014
What role does the BSI play in the new cash register security system?
The Federal Office for Information Security (BSI) is tasked with defining the technical requirements for the security system and certifying it. Through this certified system, every digital record – such as business transactions or training entries – is logged in a tamper-proof manner.
As of: April 2016
What role does the distribution channel play in assessing the add-back of trade fair booth rental costs?
The distribution channel is a key criterion. If sales are not made directly to end customers but indirectly through an established dealer network, trade fair participation is not strictly necessary for product sales. In this case, alternative advertising options are available, meaning the booth does not permanently serve the business operations and no add-back applies.
As of: July 2022
What role does the debit note play in the complaint process?
The debit note (Belastungsanzeige) is issued by the recipient of the goods or services to flag a complaint, e.g. in the case of defective deliveries. Even after 01/01/2013, it remains a debit note and is not reclassified. The supplier should then issue a corrected invoice or cancellation invoice — but not a credit note (Gutschrift).
As of: August 2013
What role does asset valuation play in the simplified model?
The model aims to replace valuations as far as possible with actual figures. The decisive factor is to be the liquid inflows to the heir or recipient as a concrete, market-independent increase in ability to pay. Non-income-producing assets are to be captured as comprehensively as possible in order to broaden the tax base and keep it controllable.
As of: August 2013
What role does the level of remuneration play in the status assessment?
The level of remuneration is merely one of many indicators within the overall assessment and is not decisive on its own. Even a fee significantly above the standard wage does not automatically lead to the assumption of self-employment if the other criteria point to integration into the company.
As of: June 2019
What role does communication with the bank play in the rating process?
Open, regular, and high-quality communication with the bank strengthens the relationship of trust and has a positive impact on the rating. Banks assess not only figures but also the quality, timeliness, and reliability of the information provided. Those who communicate actively and in a structured manner reduce uncertainties in the credit assessment.
As of: April 2005
What role does the VAT Directive play in assessing ancillary services?
Under Art. 134(a) of the VAT Directive (MwStSystRL), supplies of goods and services are excluded from the tax exemption if they are not essential to the underlying exempt supply. This requirement clarifies the interpretation of § 4 No. 16 UStG and means that only services closely linked to care are exempt.
As of: November 2023
What role does voluntary disclosure play in the automatic exchange of information in Europe?
Voluntary disclosure is regarded as an important prerequisite for the introduction of an automatic exchange of information in Europe. Since foreign banks have no interest in reporting clients directly to the German judiciary, voluntary disclosure makes it easier for banks to urge their clients to come forward to the tax authorities.
As of: February 2014
What role does the dedication of assets play for the tax-privileged status of a sports club?
The dedication of assets to the club's purpose is a prerequisite for tax-privileged status (Gemeinnützigkeit) and must continue even beyond the club's dissolution. It ensures that the club's assets are used exclusively for the statutory purpose and not diverted for private use. Without this commitment, the tax-privileged status is at risk and tax benefits no longer apply.
As of: May 2022
What role does a collective bargaining agreement play in dismissals during short-time work?
If an applicable collective bargaining agreement exists and contains provisions on wage payments upon dismissal during short-time work, those provisions take precedence. The amount of the wage claim is then determined by the collective agreement, without requiring further interpretation.
As of: March 2021
What role does a separate office play in determining the principal place of activity?
For typical private rental activities, no separate office at the property is required. If such infrastructure is lacking and visits are limited to occasional inspection or administrative trips, there is generally no fixed place of activity, and the deduction is therefore not restricted to the commuter allowance (Entfernungspauschale).
As of: April 2016
What role does formally proper bookkeeping play in the time-series comparison?
If the bookkeeping is formally proper, the time-series comparison is unsuitable for proving material deficiencies and may not be used to justify additional estimates. The method therefore cannot undermine existing formally proper bookkeeping; its application requires further substantive objections.
As of: August 2015
What role does long-term commitment to the employer play in distinguishing initial from secondary vocational training?
A long-term commitment to the employer, for example through repayment obligations upon early termination of the employment relationship, is an indication that professional activity is the primary focus. This means the qualification acquired in the first training phase is already being used on a permanent basis. This argues against a unified initial training and therefore against entitlement to child benefit.
As of: June 2023
What role does § 176 Abs. 2 AO play in protecting legitimate expectations in these cases?
§ 176 Abs. 2 AO protects taxpayers when tax assessments are amended after a supreme federal court rules that a general administrative directive is incompatible with applicable law. Since the construction service providers relied on the BMF guidelines and the BFH rejected them, protection of legitimate expectations would normally apply. However, § 27 Abs. 19 UStG expressly overrides this protection – and this is the core of the constitutional dispute.
As of: June 2015
What role does Section 33 (2) sentence 4 EStG play in divorce costs?
The amendment effective from 2013 generally restricted the deduction of litigation costs as extraordinary expenses (außergewöhnliche Belastung). However, the Münster Tax Court considers divorce litigation costs deductible, since without the divorce the taxpayer would risk losing their livelihood and being unable to meet essential needs. They therefore fall under the exception to the new rule.
As of: December 2014
Which renovation costs are not deductible as extraordinary expenses?
Standard repair and modernization measures as well as the remediation of construction defects are generally not deductible. Also excluded are expenses where the taxpayer fails to pursue existing and enforceable civil law claims against a responsible third party.
As of: May 2012
Which divorce-related costs does the tax office typically not recognize?
In practice, the tax office often only recognizes costs directly related to the divorce itself and the equalization of accrued gains. Costs concerning maintenance arrangements or other ancillary divorce matters are usually rejected. However, this practice contradicts the case law of the FG Düsseldorf, according to which all divorce costs are unavoidable and therefore deductible.
As of: April 2013
Which written form requirements are reduced by the BEG IV?
The BEG IV eliminates numerous written form requirements or downgrades them to text form in order to avoid media disruptions in digital processes. Affected areas include commercial lease agreements, association law, contract law, and various commercial and professional regulations. The changes take effect on the first day of the quarter following the law's promulgation.
As of: December 2024
Which schools qualify for the special expenses deduction for school fees?
Eligible schools include those under independent sponsorship, such as foundation schools, as well as predominantly privately funded schools. A key requirement is that the school is recognized by the competent state ministry to issue diplomas. Without this official state recognition, the special expenses deduction under § 10 Abs. 1 Nr. 9 EStG is not available.
As of: February 2024
What special depreciation applies to new electric delivery vehicles?
For new electric delivery vehicles with a total weight of up to 7.5 tons, a special depreciation of 50% of the acquisition costs is granted in the year of purchase, in addition to the regular straight-line depreciation under § 7 Abs. 1 EStG.
As of: August 2019
What special depreciation applies to business buildings destroyed by a natural disaster?
In cases of irreparable damage to a business building, a special depreciation of up to 30% is granted. It can be claimed within the first three years after completion of the new building, with the option to spread it across this period. The overall cap of 30% must not be exceeded.
As of: October 2021
Which special deadlines apply to the 2019 and 2020 tax returns due to COVID-19?
For 2019, the deadline was extended to 31 August 2021 if the return was prepared by a Steuerberater (German Certified Tax Advisor). For 2020, the deadline for self-prepared returns ended on 1 November 2021, while returns prepared by a Steuerberater were due on 31 May 2022.
As of: July 2021
What special rules apply to businesses valued at €26 million or more?
From a business value of €26 million, the relief rate of 85% or 100% is gradually reduced and ceases entirely at around €90 million. Upon application, the tax may be deferred for up to seven years, with interest accruing only from the second year of deferral. In addition, the tax may be waived if it cannot be paid from available income (50% of private assets plus 50% of other assets received).
As of: October 2016
What special rule applies to people with disabilities?
Taxpayers with a degree of disability of at least 70% or at least 50% combined with a walking impairment may deduct actual travel costs instead of the flat rate (§ 9 Abs. 2 EStG). Additional trips between home and place of work are also deductible. Proof is provided by an official document.
As of: January 2022
What special rules apply to retail and the travel, events and cultural sectors?
In retail, losses in value on unsellable or seasonal goods (e.g. clothing, fruit, vegetables) qualify as eligible fixed costs, and depreciation on assets can be claimed at 50%. In the events and cultural sectors, internal and external cancellation costs from March to December 2020 are eligible, supplemented by special payments for cancelled events.
As of: March 2021
What duty of care does a host have toward guests on New Year's Eve?
A host must actively prevent sources of danger within their premises. If a guest brings visibly dangerous items such as firecrackers into the living room, the host must intervene. Failing to do so can result in shared liability for any resulting damages.
As of: December 2013
Which tax filings require authenticated electronic transmission as of 01/01/2013?
As of 01/01/2013, the preliminary VAT return, the application for a permanent filing extension, the registration of the VAT special advance payment, and the payroll tax return must be transmitted electronically with a security certificate (authentication). Transmission without registration is no longer possible.
As of: October 2012
What tax exemption applies to fuel in truck tanks when crossing the border?
An exemption applies provided the fuel is carried in a tank installed by the manufacturer of the vehicle. This is intended to privilege the typical cross-border use of commercial vehicles with standard tank equipment. However, it is disputed whether this exemption also covers tanks installed at a later stage.
As of: July 2013
Which VAT exemption is still available for sports clubs under the UStG?
For sports clubs, a VAT exemption is now only possible under Section 4 No. 22 lit. b UStG for sporting events. Any broader general exemption could only be achieved through legislative amendment.
As of: May 2022
What tax reliefs apply to family businesses with transfer restrictions?
Customary transfer restrictions on shares in family businesses are recognised when determining the enterprise value, granting a tax exemption of up to 30%. The prerequisite is that these restrictions exist for two years before and 20 years after the date of death or gift. This is intended to reflect the discrepancy between the fair market value and the value actually achievable upon sale.
As of: June 2016