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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What was the tax authorities' position before the BFH rulings on services performed outside the property?
Previously, the tax office only recognized expenses for household-related services if they were performed within the spatial boundaries of the household, i.e., on the taxpayer's own property. Activities on public areas such as sidewalks were rejected. This narrow interpretation has been superseded by BFH case law.
As of: November 2014
What was the previous position of the tax authorities regarding a home office in the case of a house sale?
Until now, the tax authorities assumed that the portion of the capital gain attributable to a home office was subject to income tax as a private disposal transaction, provided the sale took place within the 10-year speculation period. The proportional taxation was determined based on the ratio of the area or value to the overall property. The Cologne Tax Court has expressly called this practice into question in its ruling.
As of: June 2018
What was the German legal position on inheritable vacation entitlements before the ECJ ruling?
As recently as 2011, the Bundesarbeitsgericht (Federal Labor Court) had ruled that all vacation entitlements expire upon the employee's death, on the grounds that the recreational purpose could no longer be fulfilled. Compensation payable to the heirs was therefore excluded. This view is no longer tenable in light of the ECJ ruling.
As of: July 2014
What was the tax authorities' previous position on the address shown on invoices?
The tax authorities previously required the supplying entrepreneur to state the address on the invoice where the business activity was actually carried out. If this information was incorrect, the invoice recipient was denied the input VAT deduction.
As of: August 2018
How far has the Bundesnotarkammer progressed with digitizing the index cards?
To date, information has been collected and digitized from around 1,250 civil registry offices. This represents about a quarter of the index cards to be transferred. The Bundesnotarkammer is carrying out this task under statutory mandate, and the transfer is proceeding on schedule.
As of: December 2014
How are small gifts during a company event included in the EUR 110 limit?
If an employee receives a small gift during a company event, for example a token of appreciation worth up to EUR 60, its value must be included when calculating the EUR 110 limit per participant. The total amount granted per participant, including such small gifts, must not exceed EUR 110 gross in order to preserve the input VAT deduction.
As of: August 2023
How are full-time apprentices and students classified for tax purposes?
They are treated as employees on a fixed-term contract with a primary place of work. As a result, the same restrictions apply to their travel, accommodation, and meal expenses as to employees permanently assigned to a primary place of work.
As of: October 2020
How are construction services treated for VAT purposes during the tax rate change?
Construction services are generally deemed performed upon acceptance (Abnahme), unless partial services have been clearly agreed. If acceptance falls within the period from 01.07.2020 to 31.12.2020, the uniform VAT rate of 16% applies. For customers without input VAT deduction rights, it may be advantageous to schedule acceptance within this period in order to pass on the lower tax burden.
As of: December 2020
How are employees converted into full-time equivalents for the Corona emergency aid?
The reference date is 31 December 2019. Employees working up to 20 hours count with a factor of 0.5, up to 30 hours with 0.75, over 30 hours and apprentices with 1.0, and 450-euro workers with 0.3. The entrepreneur as well as employees on parental leave or maternity protection are included; the decisive factor is an active employment contract on the reference date.
As of: March 2020
How are bonuses attributed for family-insured persons?
Bonuses paid to family-insured participants are attributed to the primary insured person. They are therefore reported in that person's income tax return and may reduce special expenses (Sonderausgaben), provided they relate to basic insurance benefits.
As of: March 2023
How have company bicycles been treated for tax purposes since the decree of 23 November 2012?
Under the uniform decree issued by the supreme tax authorities of the federal states on 23 November 2012, bicycles and e-bikes are treated for tax purposes in the same way as company cars. If the employer provides the employee with a bicycle for private use as well, the resulting non-cash benefit is taxable. Analogous to the 1% rule, the assessment basis is 1% of the manufacturer's recommended retail price, rounded down to the nearest full EUR 100.
As of: November 2012
How are spouses and registered civil partners treated under the simplified model?
Spouses and partners in a registered civil partnership are to be regarded as a single economic and support community. Transfers of assets between them should therefore not be subject to inheritance or gift tax. This recognises the close economic ties within the partnership for tax purposes.
As of: August 2013
How are maintenance expenses treated for partially damaged business buildings?
If the business building is only partially destroyed, maintenance expenses can be claimed as immediately deductible within the first three years – up to a maximum limit of €70,000. The same rule applies to movable assets, but without the €70,000 cap.
As of: October 2021
How are a GmbH's financial assets now treated for inheritance and gift tax purposes?
Under Section 13b ErbStG in its new version, a company's financial assets qualify as harmful administrative assets to the extent they exceed 20% of the company's value. Business liabilities must first be deducted from the financial assets. If the resulting amount exceeds the 20% threshold, the gift and inheritance tax relief no longer applies to that portion.
As of: August 2013
How are tax allowances for 2013 reapplied for?
The application for wage tax reduction must be filed with the competent tax office. This can be done in writing using the official form or in person at the tax office. Only after approval are the allowances recorded in the electronic wage tax deduction features (ELStAM).
As of: December 2012
How are profits and losses from interests in multi-tier partnerships treated for trade tax purposes?
In multi-tier partnerships, both profits and losses from interests in domestic and foreign partnerships must be excluded from the trade income of the domestic upper-tier partnership. The reason is that each partnership is an independent taxable entity for trade tax purposes.
As of: April 2016
How are job tickets taxed under the Annual Tax Act 2019 (Jahressteuergesetz 2019)?
Going forward, employer-provided benefits for commutes between the employee's home and primary place of work may be subject to a flat-rate wage tax of 25%, even if they are not granted in addition to the regular wages owed. The subsidies taxed at this flat rate are not credited against the employee's commuter allowance (Entfernungspauschale).
As of: August 2019
How are costs for accompanying persons treated under the 110-euro threshold?
The costs for an accompanying person, such as a spouse, are attributed to the employee and counted toward the 110-euro threshold. No separate allowance applies to the accompanying person. This causes the threshold to be exceeded more quickly, jeopardizing both input VAT deduction and wage tax exemption.
As of: October 2012
How are costs for attending spouses handled with regard to the EUR 110 threshold?
According to recent BFH case law, only benefits the employee receives directly are attributed to them. Costs allocated to attending spouses or partners may no longer be attributed to the employee. As a result, the EUR 110 threshold applies separately to each partner.
As of: October 2013
How are benefits from foreign occupational pension schemes taxed from 2025 onwards?
From the 2025 assessment period, benefits from foreign occupational pension schemes qualify as other income under § 22 Nr. 5 Satz 1 EStG and are fully taxable. This applies even if the underlying contributions were tax-exempt or tax-privileged abroad.
As of: December 2024
How are tenant compensation payments treated for tax purposes in cases of demolition and new construction?
If a building is demolished and a new one is constructed in its place, the construction costs qualify as production costs. In this case, settlement payments for existing tenancies also count as subsequent acquisition or production costs and are not immediately deductible (see BFH ruling of 01.10.1975 – I R 243/73).
As of: April 2023
How are care allowances and accommodation costs accounted for when calculating extraordinary expenses?
Any care allowance received must be deducted from the deductible care costs, as it constitutes a reimbursement. Accommodation and insurance costs for the engaged care workers qualify as deductible expenses. However, the tax court limits these costs to the medically necessary scope of care, which must be substantiated by specialist medical evidence.
As of: November 2016
Wie werden Preisabschläge auf Arzneimittel für gesetzliche Krankenkassen umsatzsteuerlich behandelt?
Abschläge zugunsten gesetzlicher Krankenkassen mindern die umsatzsteuerliche Bemessungsgrundlage der Arzneimittellieferung. Grund ist das sozialversicherungsrechtliche Sachleistungsprinzip, durch das eine durchgehende Umsatzkette vom pharmazeutischen Unternehmen bis zur Krankenkasse besteht. Der Hersteller kann die Umsatzsteuer daher entsprechend reduzieren.
As of: August 2016
How are premiums from closing-out transactions treated for tax purposes?
If a writer pays premiums in connection with a closing-out transaction, these must be recognised as negative income from capital investments at the time of payment. They are recorded in the loss offset pool, including any related incidental costs.
As of: December 2024
How are cleaning costs for work clothing treated for tax purposes?
For external cleaning, the full invoice amounts can be claimed. For washing in your own machine, flat-rate values per kilogram of laundry apply, graduated by household size and washing type (boil wash, colored wash, delicate wash) as well as drying and ironing. These flat rates cover all ongoing costs, including purchase and repair of the machine.
As of: December 2021
How are partial interest periods with different interest rates calculated?
If different interest rates apply within a single interest period (e.g., 2018 and 2019), the period is divided into partial interest periods and calculated on a day-by-day basis. Pursuant to § 238 Abs. 1a AO, the German interest calculation method applies: each month counts as 30 days and each year as 360 days. The 31st of a month is treated as the 30th; if the period ends on 28 or 29 February, interest is calculated only up to that date.
As of: May 2022
How are tips paid to business owners treated for tax purposes?
Tips paid to business owners (e.g. sole proprietors, principals) always constitute taxable business income. A recording obligation applies without exception and must be fulfilled depending on the cash register system in use. The tax exemption under § 3 Nr. 51 EStG applies exclusively to employees.
As of: May 2021
How are revenues from delivery services and takeaway sales offset against the November Aid (Novemberhilfe)?
November revenues are not offset up to 25% of the comparison revenue; beyond that, they are credited to avoid overcompensation exceeding 100%. For restaurants, reimbursement is capped at 75% of revenues subject to the full VAT rate from the 2019 comparison period, so that takeaway sales at the reduced VAT rate are excluded. In return, takeaway revenues during the closure period are not offset.
As of: November 2020
How are accommodation costs treated for tax purposes in cases of a second household abroad?
The assessment is made on a case-by-case basis. The decisive factor is the actually necessary accommodation costs, taking into account the housing conditions in the respective country of employment. A flat-rate floor space limit, as applied domestically, does not apply.
As of: November 2023
How are losses from the expiration of warrants treated from 2020 onwards?
Under the Annual Tax Act 2019 (§ 20 Abs. 2 Nr. 3 EStG draft), the expiration of an option is, as of 01/01/2020, explicitly no longer deemed a termination of the right. As a result, losses from worthless expired warrants held as private assets can no longer be claimed for tax purposes. The previously taxpayer-friendly BFH case law (including BFH 12/01/2016, IX R 48/14) is overridden by this new rule.
As of: October 2019
How are losses from reduced-rate letting to persons in need treated?
Any losses arising from charitable residential letting may be offset against other income from the non-profit (ideeller Bereich) activities. This allows charitable landlords to operate on a sustainable tax basis even when rents do not fully cover costs.
As of: December 2024
Wie werden Vorsorgeaufwendungen bei grenzüberschreitender Tätigkeit behandelt?
Bei Tätigkeit über Ländergrenzen hinweg gibt es Neues zum Abzug von Vorsorgeaufwendungen — Einzelheiten und Fundstelle im Beitrag. (Quelle: Deubner Recht & Steuern)
As of: December 2025
How are advertising income of a national player from contracts with the DFB taxed?
According to the BFH ruling of 22 February 2012 (X R 14/10), advertising income earned by a national player under contracts with the federation qualifies as commercial income. The player thus generates this income independently as an entrepreneur, because the employment-law obligation to participate in international matches does not include an obligation to participate in advertising activities.
As of: July 2014
How are assets between EUR 800 and EUR 1,000 treated from 2018 onwards?
Assets with acquisition costs above EUR 800 and up to EUR 1,000 net can no longer be immediately written off as low-value assets (GWG). They can, however, either be depreciated regularly over their standard useful life or, for businesses, allocated to a pooled item (Sammelposten) and depreciated on a flat-rate basis over five years. No special recording obligation applies within this value range.
As of: August 2017
How are voluntary statutory health insurance (GKV) contributions for self-employed persons calculated from 2018 onwards?
Contributions are initially set on a provisional basis using the most recent income tax assessment notice. Once the income tax assessment for the relevant contribution year is available, a final determination is made based on the actual profit. This may result in either additional payments or refunds.
As of: February 2018
How are the costs of a jointly used home office allocated between spouses?
In the case of equal co-ownership, the expenses for a jointly used home office are generally attributed to each spouse in equal shares. Each spouse may deduct their share up to the maximum amount of EUR 1,250, provided that the personal deduction requirements are met in their case.
As of: March 2017
How are the costs for accompanying persons at company events treated?
If an employee brings along an accompanying person, the proportionate costs for that person are attributed to the employee. This may cause the EUR 110 tax-free allowance to be exceeded more quickly, with the excess portion being taxable as employment income.
As of: December 2019
How are the different types of tenant fixtures depreciated for tax purposes?
Sham components (Scheinbestandteile) and operating equipment (Betriebsvorrichtungen) are treated as movable assets and depreciated over the lease term or their standard useful life pursuant to § 7 Abs. 1 and 2 EStG. Tenant fixtures held in beneficial ownership, as well as those providing a specific operational benefit, are generally classified as immovable assets and depreciated over the useful life of the building or pursuant to § 7 Abs. 5a EStG.
As of: July 2023
How are one-off high incoming payments treated during the funding period?
One-off high incoming payments that relate to an entire previous year may be recognized on a pro rata basis. This applies, for example, to GEMA payments to artists or VG Wort payments to journalists, which would otherwise have flowed disproportionately into the funding period.
As of: August 2020
How are refunded health and long-term care insurance contributions treated for tax purposes?
Under § 10 Abs. 4b Satz 2 EStG, contribution refunds must first be offset against expenses of the same type paid in the year of the refund. If a refund surplus remains for contributions under § 10 Abs. 1 Nr. 3 and 4 EStG, it is added to the total amount of income pursuant to § 10 Abs. 4b Satz 3 EStG. The reason for the refund is irrelevant.
As of: August 2023
How are deferred rent, lease or leasing payments accounted for in the proof of use?
Deferred payments such as rent, lease or leasing instalments that would have been due within the funding period can now also be taken into account. This ensures that companies which proactively negotiated deferrals are not disadvantaged compared to others.
As of: August 2020
How are medical qualifications obtained abroad recognised in Germany?
Recognition is governed by uniform federal rules for the medical professions. The assessments include, among other things, a patient presentation to verify practical skills. The federal states also review the required language proficiency, although no formal language test is prescribed.
As of: December 2013
How are multiple business trips on the same day treated for the per diem meal allowance?
If several business trips take place on the same calendar day, the individual periods of absence are added together. The €14 per diem is granted if the combined absence exceeds the 8-hour threshold.
As of: July 2022
Wie werden private Versicherungsbeiträge beim Lohnsteuerabzug berücksichtigt?
Beim Lohnsteuerabzug ändert sich die Berücksichtigung privater Kranken- und Pflegeversicherungsbeiträge — Details und Fundstelle im Beitrag. (Quelle: Deubner Recht & Steuern)
As of: December 2025
How are leased or rented properties, e.g. owned by breweries, treated?
Special exceptions apply to leased or rented properties, such as those typical for breweries. Despite being made available to third parties, they may still qualify for the preferential treatment and are not automatically classified as harmful administrative assets (Verwaltungsvermögen).
As of: September 2016
How is insolvency benefit (Insolvenzgeld) treated for tax purposes?
Insolvenzgeld is exempt from income tax under § 3 No. 2 lit. b EStG. However, it is subject to the progression clause (Progressionsvorbehalt) pursuant to § 32b Abs. 1 Nr. 1 lit. a EStG and therefore increases the tax rate applied to the remaining income. It is paid as a one-time benefit by the Bundesagentur für Arbeit (Federal Employment Agency).
As of: September 2022
How is administrative assets (Verwaltungsvermögen) treated under the reformed inheritance tax rules?
A distinction is made between privileged and non-privileged assets, with only the privileged portion qualifying for tax exemptions. A 10% flat allowance applies to Verwaltungsvermögen and is deemed non-detrimental. Financial assets such as bank balances, net of debts, qualify as privileged assets only up to 20% of the business assets.
As of: October 2016
How is charging a private electric vehicle at the employer's premises treated for tax purposes?
Benefits granted by employers to their employees for the electric charging of a private electric or hybrid electric vehicle on company premises are tax-exempt under the EStG. The rule applies for a limited period from 01.01.2017 to 31.12.2020.
As of: May 2016
How is the existence of a marital community of life proven in case of dispute?
The tax court bases its decision on the overall picture of the circumstances. Relevant evidence includes the personal hearing of both spouses and witness testimony (e.g., from the children). Among the factors examined are the reasons for the spatial separation, the frequency of joint activities, shared financial commitments and concrete plans for the future of the marriage.
As of: March 2017
How is the civil servant death benefit calculated?
The civil servant death benefit is based on the deceased official's monthly gross salary or pension payments. Surviving dependents receive twice the monthly gross salary or pension. It is intended to cover special expenses arising after death, such as funeral costs.
As of: September 2021