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 42 / 47
How should the usage requirements for a home office and ancillary rooms be assessed?
The requirements for tax recognition must be examined separately for each room and each ancillary room. The decisive factor is whether the respective room is used almost exclusively for professional or business purposes. Any non-negligible private use precludes the deduction of costs for that room.
As of: June 2016
How should the time limits for short-term mini-jobs be applied under BSG case law?
The Bundessozialgericht has ruled that the limits of 3 months and 70 working days apply as equivalent alternatives – regardless of weekly working hours. In practice, both time limits must be reviewed. For multiple mini-jobs, working times are aggregated; for the 3-month calculation, a full calendar month counts as 30 days.
As of: August 2021
How must advance payments received be reported on the balance sheet?
Advance payments received must be recognized by the recipient at their nominal value as a liability under the balance sheet item 'advance payments received on orders', with no impact on profit or loss. They may only be derecognized once the recipient has realized a receivable, i.e., once the contractually owed performance has been rendered. As an alternative for advance payments on inventories, these may be openly deducted from inventory assets (balance sheet contraction).
As of: September 2019
How is the exemption threshold for company celebrations set to change from 2015?
The plan is to enshrine the previous administrative regulation in law and to raise the exemption threshold from EUR 110 to EUR 150 per event and per employee. At first glance, this increase appears generous.
As of: October 2014
How should businesses and real estate be treated under the BVStB model?
Businesses and real estate should be able to continue operating unchanged, without pressure to sell. The resulting inheritance or gift tax should be payable from the ongoing earnings of these assets, provided they are not sold. This is intended to preserve the substance of the assets and avoid liquidity shortfalls.
As of: August 2013
How should pension obligations be treated within administrative assets according to the IDW?
The IDW requires that the assets to be excluded from administrative assets be capped at the actual amount of pension obligations existing at the time of transfer. Valuation should follow commercial law principles in order to reflect the real level of obligations.
As of: August 2016
How should a shareholder pay for tradesman services rendered by their own GmbH in order to claim § 35a EStG?
The shareholder should actually pay the invoice amount by bank transfer to the GmbH's account, rather than offsetting it via the shareholder current account. Only then is the payment flow to an account of the service provider documented within the meaning of § 35a Abs. 5 S. 3 EStG, and the tax reduction will be recognised.
As of: December 2022
How should you respond to a suspicious email regarding the transparency register?
The BMF advises not to respond to such emails, not to register on the websites referenced, and not to make any payments. When in doubt, the notification obligation should be fulfilled exclusively via the official website www.transparenzregister.de.
As of: January 2020
How should you respond to a suspicious email purportedly from the BZSt?
Recipients should not click on any links or enter personal data or account information. The email should be deleted unopened or forwarded to the BZSt for review. Do not reply to the sender.
As of: January 2017
How should you handle suspicious emails sent in the name of the BZSt?
Such emails should never be opened, nor should their attachments. We recommend deleting the message immediately. Executable files (.exe) or packed archives (.rar) in connection with alleged tax assessments are a clear warning sign.
As of: May 2015
How should those affected respond to a tax assessment regarding the sale of a vacation property?
If the tax office has subjected the sale of a privately used vacation property to taxation, an appeal should be filed against the tax assessment within the statutory appeal period. As justification, reference can be made to the pending appeal proceedings before the BFH under case number IX R 37/16 in order to keep the assessment open.
As of: July 2017
How should taxpayers proceed when the deduction of income-related expenses on capital income is denied?
Affected taxpayers should file an objection (Einspruch) against the tax assessment and rely on the ruling of the Tax Court of Baden-Württemberg (9 K 1637/10) as well as the pending appeal before the BFH (VIII R 13/13). This keeps the assessment procedurally open until the final decision of the highest court.
As of: February 2013
How should driving schools issue their invoices while the legal situation remains unresolved?
We recommend issuing invoices without separately stated VAT. If VAT is shown openly, the driving school owes it even if the service is later classified as tax-exempt – and all invoices would then have to be corrected. The specific approach should, however, be discussed with the Steuerberater (German Certified Tax Advisor) on a case-by-case basis.
As of: March 2016
How should restaurant operators respond to an additional tax assessment based on the 30/70 method?
Affected restaurant operators should critically review the calculation results and, if necessary, challenge them, as tax auditors often assume revenues that are not economically achievable. Arguments such as takeaway sales, deviating consumption patterns or specific characteristics of the business can speak against a blanket application of the method. Citing relevant tax court rulings can further support your position.
As of: March 2016
How should GbR partners contractually safeguard against the loss of the managing partner?
Since no emergency managing director can be appointed for a GbR, a clear provision in the partnership agreement is advisable, for example by designating a deputy, a succession clause, or a power-of-attorney arrangement. This ensures the GbR remains capable of acting even if the sole managing partner is unavailable and helps avoid disputes among the remaining partners.
As of: January 2015
How should corrections following complaints or returned goods be properly labeled?
If the supplier corrects the original invoice after a complaint or return of goods, the document should be expressly labeled as a "Rechnungskorrektur" (invoice correction) or "Stornorechnung" (cancellation invoice). The previously common term "Gutschrift" (credit note) is misleading here, as there is no credit note within the meaning of VAT law. This clear designation prevents confusion and input VAT risks.
As of: August 2013
How should taxpayers respond to the pending proceedings on the deduction limitation for hospitality expenses?
An appeal should be filed against all tax assessments still open since 2004, together with a request to suspend the proceedings pending the decision of the Bundesverfassungsgericht. Reference should be made to case number 2 BvL 4/13 in order to benefit from the outcome of the model proceedings.
As of: March 2014
How should taxpayers proceed if litigation costs are denied as extraordinary expenses?
If the tax office denies the deduction, file an objection referring to the pending BFH proceedings and request suspension of the proceedings. This keeps the tax assessment open until the BFH issues a final decision on deductibility. Affected taxpayers can then retroactively benefit from a favorable ruling.
As of: April 2013
How should taxpayers respond if the deduction of the flat-rate tax as a business expense is denied?
If the tax office denies the deduction of the flat-rate tax under § 37b EStG on gifts as a business expense, taxpayers should file an objection against the tax assessment and, referring to the pending appeal proceedings before the BFH, request a stay of proceedings. This keeps the case open until the BFH has issued a final ruling.
As of: March 2014
How should taxpayers proceed with high income-related expenses on capital income?
Taxpayers who incurred higher income-related expenses in connection with investment income should file an objection against the relevant tax assessment notice and refer to the case pending before the BFH under reference VIII R 34/13. At the same time, it is advisable to apply for a stay of proceedings pursuant to § 363 Abs. 2 AO until the BFH has issued its ruling. This keeps the assessment open, allowing a potentially favourable decision to be taken into account.
As of: March 2014
How should working hours be documented for mini-jobbers?
You must record the start, end, and total duration of daily working time. Documentation must be kept in written or electronic form and retained by the employer for at least two years. The records must be available for inspection at any time by the tax office or customs authorities (Zoll).
As of: July 2013
How should businesses implement the labeling requirement for self-billed invoices (Gutschriften) in practice?
Companies should review their billing templates and ERP systems and ensure that every VAT self-billed invoice expressly contains the word 'Gutschrift'. In addition, a clear internal distinction must be made between Gutschriften and corrective invoices in order to avoid input VAT risks.
As of: December 2012
How should business owners prepare for a cash register inspection (Kassennachschau)?
Business owners should keep their cash register records complete, timely, and tamper-proof, and retain all receipts and individual transaction records. It is advisable to review the cash register systems used for compliance with statutory requirements, as auditors may arrive without prior notice.
As of: May 2016
How strongly does the rating grade affect the loan interest rate?
The rating grade has a significant impact on interest conditions. At KfW, the interest rate spread between a good and a poor grade exceeds 4 percentage points. At local house banks, the spread can range between 1.5% and 5.4%, and in individual cases even up to 8%.
As of: December 2020
How much will tax revenue from the solidarity surcharge decline as a result of the reform?
By limiting the surcharge to high and very high incomes, tax revenue from the solidarity surcharge will be reduced by roughly half. The federal government is thus forgoing a significant portion of its previous revenue in order to relieve the broad majority of taxpayers.
As of: October 2019
How do companies that have already received Überbrückungshilfen III Plus apply for Q4 2021?
Companies that have already applied for Überbrückungshilfen III Plus for the period July to September 2021 can submit a simplified amendment application for Q4 2021. Those who have not yet filed an application can submit an initial application covering the full funding period from July to December 2021.
As of: November 2021
How and when is the mobility premium applied for at the tax office?
The mobility premium (Mobilitätsprämie) is granted by the Finanzamt upon application; the relevant form is part of the income tax return and can be submitted together with it. The application must be filed within four calendar years following the year for which the premium is claimed. It is only assessed if the calculated premium exceeds €10.
As of: March 2022
How do extraordinary depreciation and going-concern value write-downs differ?
Under German commercial law, the term used is extraordinary depreciation (§ 253 Abs. 3 Satz 3 and Abs. 4 HGB), while tax law refers to the going-concern value write-down (Teilwertabschreibung, § 6 Abs. 1 Nr. 1 Satz 2 EStG). Both concepts address the same underlying issue: a loss in value of an asset. Differences arise, however, in their specific application to fixed and current assets, as well as in whether they are mandatory, optional, or prohibited.
As of: April 2021
How do commercial credit notes and VAT credit notes differ?
A VAT credit note (umsatzsteuerliche Gutschrift) is issued by the recipient of the service instead of the supplier. A commercial credit note (kaufmännische Gutschrift), by contrast, is a correction or cancellation invoice issued by the supplier, for example after a complaint or return of goods. The latter should no longer be called a "Gutschrift," but rather a "Rechnungskorrektur" (invoice correction) or "Stornorechnung" (cancellation invoice), in order to avoid confusion and VAT-related risks.
As of: August 2013
How does the treatment of advance payments received differ between the commercial and tax balance sheets?
In the tax balance sheet, the advance payment must be recognized as a liability on a gross basis, with the included VAT recorded as a prepaid expense (aktiver Rechnungsabgrenzungsposten). The commercial balance sheet does not require this approach: only the net amount is shown under 'advance payments received on orders', while the VAT is recorded under other liabilities until it is remitted to the tax office.
As of: September 2019
How does gift tax differ for cash assets held privately versus in business assets?
When cash is gifted from private assets, full gift tax generally applies; only the personal allowance reduces the taxable base. If, however, the cash is held within a GmbH and the GmbH shares are gifted, the relief provisions for business assets can reduce the tax burden to zero. This unequal treatment was the reason for the planned legislative amendment.
As of: November 2012
How does the tax treatment of expropriation differ from compulsory auction?
Expropriation occurs without any opportunity for the owner to participate and therefore does not trigger a disposal transaction under § 23 EStG. A compulsory auction, by contrast, can be averted by the debtor, which is why intentional action is presumed. As a result, only the compulsory auction is potentially taxable.
As of: May 2022
How does the Central Register of Wills support estate proceedings in the event of death?
Whenever a death occurs, the register electronically checks whether documents relevant to succession exist for the deceased and notifies the competent probate court. The court or notary holding the documents is also informed and asked to forward them to the probate court. This allows the deceased's last will to be executed more quickly.
As of: December 2014
How did the Rheinland-Pfalz Tax Court rule on a lessee's renovation costs incurred before the opening of business?
The Rheinland-Pfalz Tax Court held that when an entire commercial business is leased (in this case, a snack bar), Section 2(5) GewStG applies and the lessee is treated as a fictitious new establishment. As a result, renovation costs incurred after the lease began but before the actual opening of business are deductible for trade tax purposes. Participation in commercial activity is deemed to commence from the start of the lease.
As of: February 2022
How common is ISO certification in the tax advisory sector?
Significantly fewer than 15 percent of tax advisory firms in Germany are certified under DIN EN ISO 9000 ff. Among firms recognized as top tax advisors by Focus Money, the share of certified firms is markedly higher. Certification is therefore regarded as a quality indicator that only a minority of the industry can demonstrate.
As of: August 2009
What applies when opening a car door toward passing cyclists?
Anyone opening a vehicle door must act in accordance with § 14 StVO in such a way that any endangerment of other road users is ruled out. If a person opens the door immediately in front of an approaching cyclist, they are typically solely liable for the resulting damages.
As of: June 2014
How do notice periods extend with increasing length of service?
Under § 622 Abs. 2 Sentence 1 BGB, notice periods extend in stages depending on the length of service. The longest statutory notice period is seven months to the end of the month and applies to very long periods of service.
As of: December 2014
Wie versteuere ich Gewinne aus Kryptowährungen?
Gewinne aus Kryptowährungen können als private Veräußerungsgeschäfte steuerpflichtig sein. Die Infografik finden Sie im Merkblatt-Verzeichnis unter "Kryptowährungen". (Quelle: Deubner Verlag)
Wie versteuere ich die private Nutzung meines Dienstwagens?
Die Privatnutzung eines Dienstwagens wird pauschal oder per Fahrtenbuch versteuert. Die Infografik finden Sie im Merkblatt-Verzeichnis unter "Dienstwagennutzung Arbeitnehmer". (Quelle: Deubner Verlag)
How is the contribution burden distributed in the Künstlersozialversicherung (German Artists' Social Insurance)?
Funding comes from three sources: the artist or publicist pays 50%, the commissioning company contributes 30% via the Künstlersozialabgabe (artists' social security levy), and the federal government covers the remaining 20% as a subsidy.
As of: January 2022
What percentage of childcare costs is tax-deductible from 2025?
Starting with the 2025 assessment period, parents can claim 80% of their childcare costs as special expenses (Sonderausgaben). Previously, only two-thirds of the expenses were deductible. As a result, a higher share of the actual costs is recognized for tax purposes.
As of: December 2024
What is the maximum number of working days that can be claimed for the commuter allowance?
For a 5-day work week, the tax office accepts a maximum of 230 days per year; for a 6-day work week, up to 280 days. Vacation days and sick days must be deducted, as only actual trips made may be claimed.
As of: January 2022
How many vehicle records were transferred during the reform?
As part of the administrative reform, data on approximately 58 million vehicles was migrated in stages, starting in the first quarter of 2014, into the new automated system of the customs administration. This provided the technical basis for the transfer of motor vehicle tax administration on 01/07/2014.
As of: January 2014
How many family home trips per week are deductible under a dual household arrangement?
One family home trip per week between the residence and the primary place of work is deductible, even if the taxpayer commutes more often (§ 9 Abs. 1 S. 3 Nr. 5 S. 5 EStG). EUR 0.30 may be claimed per full kilometer of the one-way distance.
As of: November 2023
How many skilled trades businesses in Germany have their own website?
According to a 2012 study by master painter and marketing expert Werner Deck, which analyzed more than 1,600 skilled trades businesses, only about 54% have a website. The use of social media such as Xing or Facebook is significantly lower still. As a result, many businesses miss out on visibility and potential customers.
As of: August 2013
How many private-use values must be applied when several cars are part of the business assets?
Private use must only be applied for as many vehicles as can actually be used by the taxpayer and persons belonging to their private sphere. If, for example, six company vehicles are available but only three persons are entitled to use them, the 1% rule applies to only three vehicles. This represents a significant easing compared with the previous practice.
As of: November 2012
How many Steuerberater are there in Germany?
More than 86,000 Steuerberater (German Certified Tax Advisor) are licensed in Germany. Given this large number, quality indicators such as certifications and independent awards serve as important guidance when choosing an advisor.
As of: January 2011
How many tax advisory firms are recognized annually by Focus Money as Top Steuerberater (German Certified Tax Advisor)?
Focus Money recognizes approximately 300 tax advisory firms each year as Top Steuerberater. In 2018, the award was published in issue 17/2018 under the title 'Beratung erster Klasse' (First-Class Advice).
As of: April 2018
How many taxpayers will benefit from the planned solidarity surcharge reform?
According to the German Federal Government, roughly 90 percent of previous solidarity surcharge payers will be fully exempted. A further 5 percent will see their burden reduced. Only taxpayers with high and very high incomes will continue to pay the surcharge in full.
As of: October 2019
What was the procedural history in the BFH ruling VI R 8/19 on death benefits?
At first instance, the Finanzgericht (tax court) ruled in favor of the plaintiff heiress and treated the death benefit as tax-exempt under § 3 Nr. 11 EStG. However, the BFH overturned this decision, holding that the death benefit must be treated as taxable employment income under § 19 EStG.
As of: September 2021