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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Does the entitlement to Kurzarbeitergeld (short-time work allowance) lapse if the employment relationship is terminated?
Yes. Kurzarbeitergeld from the Bundesagentur für Arbeit (Federal Employment Agency) is subject to the condition that the employment relationship has neither been terminated nor ended by a mutual termination agreement. If notice of termination is given, the entitlement to Kurzarbeitergeld lapses, and the employer must once again pay the wages itself.
As of: March 2021
Does the inheritance tax exemption for a family home cease to apply upon transfer subject to a reserved usufruct?
Yes. According to the Münster Tax Court (judgment of 28 September 2016, 3 K 3757/15 Erb), the exemption under § 13 Abs. 1 Nr. 4b ErbStG ceases to apply if the surviving spouse transfers the inherited family home to a child within ten years – even if they reserve a lifelong right of usufruct and continue to occupy the property themselves. Mere personal use as a usufructuary is not sufficient, as the tax exemption is tied to continued ownership.
As of: November 2016
Does the tax exemption cease to apply if the scholarship is tied to a subsequent employment obligation?
Yes. The Tax Court of Berlin-Brandenburg (judgment of 30 March 2022, 16 K 2083/20) ruled that the tax exemption under § 3 Nr. 44 EStG does not apply if the recipient is obliged to take up employment for a specified period after completing their studies. In the case at hand, a teacher trainee was required to work as a teacher in Berlin for at least three years. An appeal is currently pending before the BFH.
As of: July 2022
Does statutory vacation entitlement accrue during unpaid special leave?
Yes. According to the BAG ruling of 06.05.2014, statutory vacation entitlement accrues even when the employment relationship is suspended due to unpaid special leave. The only requirements are the legal existence of an employment relationship and the one-time fulfillment of the waiting period.
As of: August 2014
Does the care allowance under Section 33b (6) EStG also cover the value of one's own care work?
No. The care allowance only covers the typical material costs usually associated with providing care, such as care supplies and hygiene products. The value of the caregiver's own services is not compensated by the lump-sum allowance and is also not separately deductible.
As of: May 2015
Will recipients of basic social security receive a Corona supplement in 2021?
Yes, adult recipients of basic social security will receive a one-time Corona supplement of 150 euros. The requirement is an entitlement to social benefits (Sozialgeld) or unemployment benefit II (Arbeitslosengeld II) in the 2021 calendar year.
As of: March 2021
Do pensioners and retired civil servants receive the energy price allowance?
Individuals receiving only a pension or retirement benefits (e.g., civil servant pensions) are not entitled to the energy price allowance, as these payments are not among the qualifying types of income. They are only eligible if they additionally generate income under § 13, § 15, § 18 or § 19 Abs. 1 S. 1 Nr. 1 EStG.
As of: July 2022
Are gifts to business associates up to EUR 35 subject to the flat-rate tax under Sec. 37b EStG?
According to the circular issued by the OFD Frankfurt (Az. S 2297b A-1St 222), mere tokens of appreciation given to third parties up to a net value of EUR 35 do not have to be included in the assessment base for the flat-rate tax under Sec. 37b EStG. This applies the EUR 40 threshold for employees (R 19.6 LStR 2011) by analogy to gifts to business associates. The simplification has been coordinated nationwide between the federal government and the German states.
As of: August 2013
Do costs for furnishings under a dual household arrangement fall under the EUR 1,000 cap?
No. According to the BFH ruling of 04.04.2019 (VI R 18/17), expenses for furnishings and household items, including depreciation, do not count as accommodation costs within the meaning of § 9 Abs. 1 Satz 3 Nr. 5 Satz 4 EStG. They are deductible in full as other additional expenses of a dual household (doppelte Haushaltsführung) and qualify as work-related expenses, provided they are necessary.
As of: June 2019
Does recording card payments in the cash book invalidate the bookkeeping?
Generally not. When weighing further deficiencies in view of a potential rejection of the bookkeeping under § 158 AO, this formal defect is regularly disregarded. The prerequisite is that the payment process is sufficiently documented and the verifiability of the actual cash balance remains ensured at all times.
As of: July 2018
Will the property tax reform lead to higher housing costs?
In principle, the reform is not intended to make housing more expensive. Since property values have generally risen over the decades, the federal government can counteract this through the tax assessment rate (Steuermesszahl), and municipalities are urged to adjust their multipliers (Hebesätze) accordingly. Nevertheless, an additional burden on tenants and owners, particularly in metropolitan areas, cannot be ruled out.
As of: August 2019
Does the transfer of a pension commitment against a settlement payment result in taxable wages?
No. According to the BFH ruling of 18.08.2016 (Az. VI R 18/13), the payment of a settlement amount in the context of an assumption of debt does not result in a wage inflow to the employee. Reasoning: The employee's claim to future pension payments is not economically fulfilled; only the debtor of the pension obligation changes.
As of: November 2016
Does a one-time engagement exceeding EUR 450 automatically trigger the artists' social security contribution?
No. The Federal Social Court has ruled that merely exceeding the EUR 450 threshold under Section 24 (3) KSVG does not automatically trigger a contribution obligation to the Künstlersozialkasse (Artists' Social Security Fund). The decisive factor is whether assignments are placed with a certain regularity and continuity. A one-time engagement does not meet this requirement.
As of: August 2022
Which expenses are eligible for foreign VAT refunds?
Typical refundable items include fuel, tolls, rental cars, repairs, hotels, telephone, and trade fair costs incurred during business trips or business activities abroad. The expenses must have been used for your own business, and you must hold proper invoices showing VAT separately.
As of: March 2013
Which professions benefit most from a practice analysis?
Steuerberater (German Certified Tax Advisor), Rechtsanwälte (German Attorneys-at-Law) and Wirtschaftsprüfer (German Statutory Auditors) benefit in particular from a structured practice analysis. These regulated professions face high quality standards and can strengthen their competitiveness through a systematic review of processes and services.
As of: March 1997
Which categories of income are subject to the cash-basis (Zufluss-/Abfluss) principle?
The principle applies without restriction to the surplus income categories: income from employment (§19), capital investments (§20), rental and leasing (§21), and other income (§22 EStG). For profit-based income categories, it applies only if profits are determined via the cash-basis income statement under §4 Abs. 3 EStG. It does not apply to the accrual-based balance sheet method under §4 Abs. 1 EStG.
As of: February 2022
For which vehicles does the 1% rule not apply because private use is deemed excluded?
Private use is typically denied for workshop vans that are objectively only suitable for transporting goods, as well as for vehicles made available exclusively to employees. The BMF letter dated 15.11.2012 added demonstration vehicles of car dealers, vehicles intended for rental, and vehicles of taxpayers without a fixed business location or with mandatory vehicle use for service delivery to this group.
As of: November 2012
Which corporate forms are subject to the stricter liability obligations of managing directors?
The duties to assess insolvency and to file for insolvency in due time apply to managing directors of limited liability entities such as GmbH, AG, and GmbH & Co. KG. In all these constellations, a breach of duty can lead to personal liability and criminal consequences.
As of: August 2013
Which hotel services are subject to the reduced VAT rate of 7%?
Since 1 January 2010, the reduced VAT rate of 7% applies to the rental of living and sleeping accommodation that an entrepreneur provides for the short-term lodging of guests. Services that do not directly serve the rental are excluded, even if they are covered by the overnight charge.
As of: December 2013
For which services do bonus payments not qualify as a contribution refund?
A contribution refund does not apply if the bonus payment relates to services outside basic health insurance coverage, such as alternative medicine or professional dental cleaning. The same applies to bonuses promoting health-conscious behavior, such as memberships in a sports club or gym, provided the insured person bore the expenses themselves. In these cases, no reduction of special expenses (Sonderausgaben) is required.
As of: March 2023
Which invoices are exempt from the e-invoicing obligation?
Exempt from the e-invoicing obligation are small-value invoices up to EUR 250 gross (§ 33 UStDV) and tickets for passenger transport (§ 34 UStDV). In these cases, other invoice formats such as paper invoices or electronic invoices in non-compliant formats remain permissible. Also not affected are B2C transactions and supplies that are tax-exempt under § 4 Nr. 8-29 UStG.
As of: November 2023
Which legal form is § 29 BGB (emergency appointment) actually intended for?
§ 29 BGB exclusively governs the emergency appointment of a board member of an association (Verein) when the required board members are missing and the association would therefore be unable to act. The provision cannot be applied to partnerships such as the GbR.
As of: January 2015
Which assets qualify for the reintroduced declining-balance depreciation?
The declining-balance depreciation applies to movable fixed assets acquired or produced after 31 December 2019 and before 1 January 2022. Larger production facilities may also qualify. Buildings are excluded from declining-balance depreciation.
As of: October 2020
Which freelance activities qualify for the lump-sum business expense deduction?
The tax authorities allow a lump-sum business expense deduction (H 18.2 EStH) for four groups of activities: full-time writing and journalistic work, secondary scientific, artistic and writing activities, part-time teaching and examining activities, as well as self-employed midwives and childminders. The lump sum can be claimed without supporting receipts.
As of: December 2023
For what period does the increased additional earnings limit of EUR 44,590 apply?
The increased additional earnings limit of EUR 44,590 applies on a temporary basis until the end of 2020. Thereafter, the regular limit of EUR 6,300 per year will resume, unless a further statutory extension is enacted.
As of: March 2020
For which period can the tax reduction under § 35b EStG be claimed?
The reduction is granted for income that was subject to inheritance tax as an acquisition upon death during the assessment period or in the four preceding assessment periods. This results in a maximum benefit period of five years from the date of the decedent's death.
As of: May 2024
For what period can Überbrückungshilfen III Plus and Neustarthilfen Plus additionally be applied for?
The Überbrückungshilfen III Plus and Neustarthilfen Plus programs have been extended to cover the fourth quarter of 2021. State subsidies can therefore now also be applied for the period from October to December 2021. The overall funding period thus runs from July to December 2021.
As of: November 2021
For which period can Bridging Aid III Plus and Restart Aid Plus be applied for in addition?
Bridging Aid III Plus (Überbrückungshilfen III Plus) and Restart Aid Plus (Neustarthilfen Plus) have been extended to cover the period from October to December 2021. The total funding period therefore spans the months from July to December 2021. Applications can be submitted as an initial application or as an amendment application.
As of: October 2021
Are development costs part of the real estate transfer tax base when buying from a municipality obliged to develop the land?
No. If a municipality obliged to provide development sells an undeveloped plot and the buyer additionally assumes the obligation to pay a development contribution, generally only the undeveloped plot is the object of the purchase. The development costs are therefore not part of the real estate transfer tax base. This applies regardless of whether the development agreement is integrated into the purchase contract or concluded separately (BFH II R 32/20).
As of: December 2022
Do the allowances entered on the old paper income tax card remain valid?
No, the allowances entered on the paper income tax card are no longer valid. Anyone who wishes to continue having allowances – for example, for commuting between home and workplace – considered each month in their wage tax deduction must reapply for them for 2013 at the tax office.
As of: December 2012
Do the new tax exemptions under § 3a EStG and § 7b GewStG also apply to legacy cases?
According to the BFH, the statutory tax exemption provisions in § 3a EStG and § 7b GewStG do not apply to legacy cases, i.e. restructurings involving debt waivers prior to the entry into force of the new rules. Affected companies can therefore rely neither on the overturned restructuring decree nor on the new provisions.
As of: October 2017
Do the new feed-in tariffs also apply to PV systems commissioned before 30 July 2022?
No. Systems commissioned before 30 July 2022 remain subject to the previous, significantly lower tariffs (e.g., 6.23 cents/kWh for systems up to 10 kWp in July 2022). The increased rates apply exclusively to new systems commissioned on or after this cut-off date.
As of: September 2022
Are there exceptions to the subordination of shareholder loans in insolvency?
Yes, loans from a non-managing minority shareholder holding no more than 10% are generally not subordinated, regardless of voting rights or profit participation. A further exception applies to the acquisition of shares in cases of imminent or actual insolvency. In such situations, legal advice should be obtained in advance.
As of: December 2020
Are there exceptions to the requirement of bank transfer for maintenance payments?
Yes, relief may be granted on general equitable grounds if special circumstances exist in the country of residence of the supported person, such as in the case of war. This requires a corresponding administrative ruling by the tax authorities.
As of: December 2024
Gibt es Meldepflichten für Krypto-Transaktionen?
Für Krypto-Transaktionen kommen Melde- und Berichtspflichten — ab wann und für wen, steht mit Fundstelle im Beitrag. (Quelle: Deubner Recht & Steuern)
As of: December 2025
Are there differences between care leave (Pflegezeit) and unpaid special leave (Sonderurlaub) regarding vacation entitlement?
In both cases, the employment relationship is suspended without any statutory reduction of vacation entitlement. The BAG emphasizes that statutory vacation entitlement generally accrues independently of actual work performance, as long as the employment relationship legally continues to exist.
As of: August 2014
Is there already a BFH ruling on the deductibility of waste and wastewater fees?
No, a supreme court decision by the BFH is not yet available. The FG Münster did grant leave to appeal, but the appeal was rejected as inadmissible by order dated 01.09.2022 because the plaintiff missed the filing deadline. The legal question therefore remains settled for the time being by tax court rulings and the position of the tax authorities.
As of: January 2023
Is there a de minimis or exemption threshold for the short-term rental of individual rooms?
No, the law does not provide for any spatial or time-based exemption threshold for the tax-neutral short-term rental of individual residential rooms to third parties. Even a minor rental on a per-day basis results in the proportionate capital gain attributable to these rooms becoming taxable.
As of: July 2023
Is there a grace period for the introduction of ELStAM in 2013?
Yes, the tax authorities grant a grace period until the end of 2013. Employers may complete the switch to the electronic procedure during the course of 2013 without the delayed transition being objected to.
As of: November 2012
Gibt es eine besondere Abschreibung für betriebliche Elektrofahrzeuge?
Für neue E-Fahrzeuge im Betriebsvermögen ist eine eigene degressive Abschreibung vorgesehen — Details und Fundstelle im Beitrag. (Quelle: Deubner Recht & Steuern)
As of: December 2025
Is there a transitional rule for photo books supplied before 1 January 2017?
Yes. For supplies and intra-Community acquisitions of photo books carried out before 1 January 2017, it will not be challenged if these transactions are subject to the reduced VAT rate – subject to the restrictions in No. 49 of Annex 2 to the UStG. This non-objection also applies for purposes of the input VAT deduction by the recipient.
As of: May 2016
Is there a maximum amount for the commuting allowance?
The commuting allowance (Entfernungspauschale) is capped at €4,500 per calendar year (§ 9 Abs. 1 Nr. 4 S. 2 EStG). A higher amount can only be claimed if the taxpayer uses their own car or one provided for their use. For trips by bicycle, on foot, or by public transport, the €4,500 limit applies.
As of: January 2022
Is there a statutory right to time off on your own birthday?
No, there is no statutory entitlement to a day off on your birthday. Such arrangements may only arise from collective bargaining agreements, works agreements, or the individual employment contract. Otherwise, regular vacation leave must be taken.
As of: February 2014
Is there a statutory helmet requirement for cyclists in Germany?
No, there is no statutory helmet requirement for cyclists in Germany. The BGH also held that there is no general public traffic awareness that wearing a helmet forms part of a cyclist's personal protective equipment.
As of: June 2014
Are there alternatives for subsidized business consulting despite the suspension of the Corona module?
Yes, you can fall back on the regular funding program for promoting entrepreneurial know-how, provided the general requirements are met. This regular module continues to exist independently of the special Corona program and is administered through the BAFA.
As of: March 2020
Is Germany considered a high-tax country in the OECD comparison?
No. Despite its historically high tax ratio of 36.7%, Germany ranks only in the top third of OECD countries. Other states show significantly higher tax ratios, so Germany is not classified as a high-tax country.
As of: December 2014
Does a first place of work apply to fixed-term employment relationships?
Yes. If the employee is to work at a fixed business location for the duration of the fixed-term employment, this constitutes a first place of work. If the employee is reassigned to another work location during the fixed term, the first place of work no longer applies, and the business travel rules apply again from that point onward.
As of: July 2019
Does the deduction ban also apply to offenses committed negligently?
The BFH ruling of 16.04.2013 expressly refers to convictions for intentional offenses. In cases of negligently committed offenses, a different assessment may apply on a case-by-case basis, particularly where a professional or business-related nexus can be demonstrated.
As of: September 2013
Does the deduction prohibition also apply if the initial degree is not pursued within an employment relationship?
Yes. In its ruling of 05.11.2013 (VIII R 22/12), the BFH confirmed that costs for an initial degree not completed within an employment relationship cannot be deducted as anticipated business expenses. However, if the initial training takes place within an employment relationship, the deduction prohibition does not apply.
As of: February 2014
Does the BFH ruling on leasing prior to sale apply only to farmers?
No. Although the BFH ruling of 13 March 1986 (IV R 176/84) concerned an agricultural business, the principles apply to all profit-based income categories. The case law therefore also extends to commercial enterprises and professional practices.
As of: November 2022