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 6 / 47
Does the rule on acquisition-related production costs apply upon withdrawal from business assets?
No. If the same taxpayer transfers a property from business assets to private assets, this does not constitute an acquisition. Subsequent renovation costs therefore do not need to be capitalized under § 6 Abs. 1 Nr. 1a EStG, but can be claimed as immediately deductible income-related expenses.
As of: June 2023
Are employees entitled to time off on Rosenmontag or Altweiber?
No, under German law there is no statutory entitlement to time off on carnival days such as Rosenmontag, Altweiber or Faschingsdienstag. This applies even in carnival strongholds like Cologne, as confirmed by the local labor court. The Bavarian Higher Administrative Court (Az. 17P 05-3061) has also confirmed this for Faschingsdienstag. Employees must therefore take vacation if the employer does not grant a day off.
As of: February 2014
Are shift workers entitled to part-time work after parental leave?
Yes, shift workers may also claim part-time work under Section 8 TzBfG. The Higher Labour Court of Cologne (judgment of 10 January 2013, Az. 7 Sa 766/12) upheld the part-time claim of a machine operator who had previously worked full-time in three shifts and wished to work only mornings after parental leave. The decisive factor is that no sufficiently weighty operational reasons stand against the request.
As of: August 2013
Is the EUR 1,000 threshold an allowance (Freibetrag) or an exemption limit (Freigrenze)?
It is an exemption limit (Freigrenze). This means: if annual income exceeds EUR 1,000, the entire amount becomes taxable, not just the portion above the limit. An allowance (Freibetrag), by contrast, would always remain tax-free up to its amount.
As of: December 2023
Does the highest bidder have a claim for delivery in the case of an incorrectly listed eBay auction?
No. If the auction is validly cancelled due to an error such as a missing minimum price, there is no claim for delivery or transfer of title. This applies even if a bid – often very low – has already been placed, because no contract has been concluded and therefore no obligation to perform arises.
As of: January 2014
Is the customer entitled to remedy of defects under an undeclared cash payment arrangement?
No. In its ruling of 01.08.2013 (Az. VII ZR 6/13), the BGH clarified that the customer has no claims for defects under an undeclared cash payment arrangement. Claims for damages due to defective work are likewise excluded, as the contract is wholly void.
As of: August 2013
Does a patrol officer have a primary place of work at their police station?
Yes. In its ruling of 4 April 2019 (VI R 27/17), the BFH held that a patrol officer's primary place of work is the police station to which they are assigned under service regulations. It is sufficient that they perform paperwork and pre-shift briefings there; the fact that their main duties are in the field is irrelevant.
As of: July 2019
Does a contractual obligation to wear certain clothing help with the deduction as work-related expenses?
No. Even an obligation under the employment contract or service standards to wear specific items of clothing, such as shoes from the employer's own brand, does not turn them into typical work clothing. What matters is solely the objective nature of the garment and whether it can be used privately.
As of: August 2015
Into which size categories are tax consulting firms grouped in the Focus Money ranking?
The Focus Money Top Tax Advisors ranking classifies firms by size, including a segment for large firms. This segmentation ensures comparable evaluation among similarly structured firms.
As of: April 2018
Into which categories are tenant fit-outs classified for tax purposes?
Tenant fit-outs are divided into four categories: temporary components (Scheinbestandteile), operating fixtures (Betriebsvorrichtungen), other fit-outs under the tenant's economic ownership, and other fit-outs with a specific business or professional use advantage. The classification determines whether the asset is movable or immovable and how depreciation is applied.
As of: July 2023
Which law governs the VAT reduction for the restaurant industry?
The legal basis is found in the Corona-Steuerhilfegesetz (Corona Tax Assistance Act), which was adopted by the Federal Cabinet on 6 May 2020. It contains several tax relief measures to address the economic consequences of the coronavirus crisis, including the application of the reduced VAT rate to restaurant and catering services.
As of: May 2020
In which law is the planned exemption threshold for rental income provided for?
The introduction of a €1,000 exemption threshold for income from renting and leasing is provided for in the draft of the Wachstumschancengesetz (Growth Opportunities Act). Final implementation depends on the conclusion of the legislative process.
As of: December 2023
How often must MOSS returns be filed?
VAT returns under the MOSS scheme must be submitted quarterly via the online portal of the BZSt (Federal Central Tax Office). The same portal also allows you to correct returns, update registration data and deregister from the scheme if needed.
As of: November 2014
How often is the statutory minimum wage adjusted?
The statutory minimum wage is reviewed and reset every two years by the Minimum Wage Commission (Mindestlohnkommission). The first adjustment after its introduction in 2015 took effect on 01.01.2017.
As of: July 2016
To what extent are childcare costs deductible as special expenses?
Parents can claim two-thirds of documented childcare costs, up to a maximum of EUR 4,000 per child per year, as special expenses (Sonderausgaben). This applies to children up to the age of 14, regardless of whether the parents are employed. Deductible expenses include, for example, costs for kindergarten, daycare, childminders, homework assistance, or babysitters.
As of: August 2013
In which areas does digitalising accounting deliver the greatest productivity gains?
Key benefits arise from automated data transfer from upstream systems, simplified reporting, and new analytics from integrated data. Document management and interfaces/converters between different programs also improve. This reduces routine tasks and frees up capacity for analysis and advisory work.
As of: March 2017
In which areas is commercial mediation particularly useful?
Commercial mediation is especially suitable for employment law disputes, for example between employer and employee, as well as for conflicts between business partners or shareholders. It is also an attractive alternative when long-term cooperation is to be preserved. However, for matters that mandatorily require court proceedings, litigation remains indispensable.
As of: January 2013
In which German federal states are late-filing penalties for the property tax return largely excluded?
In the federal states applying the federal model – Thuringia, Berlin, Brandenburg, Bremen, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Saxony-Anhalt and Schleswig-Holstein – the automatic assessment of a late-filing penalty under § 152 Abs. 2 AO is excluded pursuant to Art. 97 § 8 Abs. 5 EGAO. In these states, late-filing penalties are imposed only in justified individual cases.
As of: February 2023
In which cases is the invoice date sufficient as the date of supply?
The invoice date is sufficient particularly for industry-standard deliveries that are carried out simultaneously with the issuance of the invoice, such as car deliveries. In these cases, the circumstances make it clear that the delivery and invoicing took place in the same calendar month. This satisfies the formal requirement under the Umsatzsteuer-Durchführungsverordnung (German VAT Implementation Ordinance).
As of: June 2018
In which cases have tax courts rejected the 30/70 method?
The FG Düsseldorf rejected the method in a case where conclusions were drawn from a high-margin product (beverages) to a low-margin product (food) (judgment of 26 March 2012, 6 K 2749/11 K.G.U.F). The FG Münster also deemed it unsuitable for restaurants with takeaway sales (judgment of 4 December 2015, 4 K 2616/14 E,G,U).
As of: March 2016
In which cases is a profit forecast for a holiday rental not required?
According to the tax authorities, a profit forecast is not required if one of the following is credibly demonstrated: the rental is transferred to an agent with a contractual exclusion of personal use; the apartment is located in an otherwise owner-occupied two- or multi-family house or in immediate proximity; several holiday rentals exist at the same location with only one used personally; or the rental period does not fall short of the locally customary period by more than 25%.
As of: January 2021
In which cases can individual assessment be more tax-advantageous than joint assessment?
Individual assessment can be particularly worthwhile if one spouse receives a severance payment, draws wage replacement benefits such as sick pay, unemployment benefits, or parental allowance, or is pursuing a second course of study. In such situations, separate tax calculation may, in individual cases, result in a lower overall tax burden than the splitting tariff applied under joint assessment.
As of: June 2014
In which skilled trades sectors did the insolvency share remain stable in 2013?
In the metal and electrical trades as well as in the food sector, the share of skilled trades insolvencies in 2013 remained unchanged compared to the previous year. There were therefore no significant shifts in insolvency activity in these sectors.
As of: August 2014
In which categories is the BAFF awarded?
The award is granted based on company size, in employee categories such as 20 to 80 employees. This allows companies of different sizes to be evaluated on a comparable basis.
As of: October 2013
What are the steps for implementing the EU patent reform?
The reform is being implemented in three steps: first, the member states' consent to participate; second, the signing of the Agreement on a Unified Patent Court; and finally, its ratification. The first two steps have already been completed, while the third step is still pending.
As of: August 2013
In which segments are top Steuerberater recognized by Focus Money?
Focus Money differentiates its awards by firm size, including a segment for large firms. This ensures that firms are only benchmarked against comparable competitors. The results are published annually in a special edition.
As of: June 2020
During which periods is the special depreciation under § 7b EStG eligible for funding?
Eligible are residential units for which the building application or building notification was submitted after 31/08/2018 and before 01/01/2022, as well as after 31/12/2022 and before 01/01/2027. For 2022, there is a funding gap, as the legislator intended to incentivize only future construction projects. The decisive date is generally the date stamp of receipt at the responsible building authority.
As of: March 2023
To what extent is school tuition deductible as a special expense?
Parents may deduct 30% of the fees paid for their child's attendance at a school under independent sponsorship or a predominantly privately financed school as special expenses (§ 10 Abs. 1 Nr. 9 EStG). Fees for accommodation, supervision, and meals are excluded. A further requirement is that the school is recognized by the competent state ministry for the issuance of certificates.
As of: February 2024
To what extent can property tax be waived in cases of vacancy?
If the normal gross yield is reduced, property tax can be lowered by up to 25%. If the yield is lost entirely, a waiver of 50% is possible. The decisive factor is the estimated normal gross yield, i.e. the customary gross rent at the beginning of the calendar year.
As of: March 2014
To what extent can tradesman services be claimed for tax purposes under § 35a Abs. 3 EStG?
Taxpayers may deduct 20% of the eligible expenses, up to a maximum of EUR 1,200 per calendar year, directly from their personal income tax liability. Eligible services include renovation, maintenance, and modernization work performed within the taxpayer's own household.
As of: December 2022
What amount of childcare costs can be claimed?
Two-thirds of the expenses for the care of a child belonging to the household are taken into account. In the decided case, annual expenses of €3,600 resulted in a deductible amount of €2,400 – however, this was not recognized due to the cash payment.
As of: June 2015
What wage must the employer pay following a termination during short-time work?
There is currently no binding statutory rule or supreme court decision on this point. Under the prevailing interpretation and an older BAG ruling, validly agreed short-time work continues to apply, meaning the employer owes only the reduced wage in the amount of the previous short-time work allowance – not the full pre-short-time-work salary.
As of: March 2021
What level of additional assessments is permissible in cases of cash management deficiencies?
The Münster Tax Court limited the additional assessment in the case at hand to a safety surcharge of 7.5% of declared revenues, as the cash flow calculation and the calculation of individual revenue segments performed by the tax office were not conclusive. A cash flow calculation requires, in particular, the determination of opening and closing balances as well as plausible cost-of-living figures. Sample calculations outside of official guideline rates should be viewed critically.
As of: April 2017
To what extent are childcare costs deductible as special expenses?
Under § 10 Abs. 1 Nr. 5 EStG, two-thirds of the expenses for the care of a child belonging to the household within the meaning of § 32 Abs. 1 EStG can be claimed as special expenses (Sonderausgaben). The deduction is capped at a maximum of EUR 4,000 per child per year.
As of: May 2022
Is skipping work on Rosenmontag (Carnival Monday) permitted?
No, unexcused absence from work is not permitted on carnival days either and may lead to consequences under employment law, including formal warnings or termination. Anyone wishing to celebrate must either request vacation leave or hope that the employer grants time off voluntarily.
As of: February 2014
Are driving lessons for licence classes B and C1 subject to VAT?
Yes, driving lessons for obtaining licence classes B and C1 are subject to VAT. The BFH confirmed this in its ruling of 23 May 2019 (V R 7/19), referring to the ECJ ruling of 14 March 2019 (C-449/17). Driving schools must therefore charge and remit the statutory VAT on their invoices.
As of: August 2019
Is driving school instruction exempt from VAT?
The Berlin-Brandenburg Tax Court (Az. 5 V 5144/15) ruled that driving school instruction – including classes A and B – can generally be VAT-exempt. However, a final decision by the BFH is still pending, so the legal situation is currently uncertain.
As of: March 2016
Is the deduction ban on first-degree training costs constitutional?
Yes. In its ruling of 10 January 2020, the Federal Constitutional Court held that the provision is compatible with the German Basic Law. While there is unequal treatment compared to second-stage training, this is justified by objective reasons.
As of: February 2020
Is the childcare allowance (Betreuungsgeld) taxable or subject to the progression clause?
The childcare allowance (Betreuungsgeld) is exempt from both income tax and social security contributions. Unlike the parental allowance (Elterngeld), it is not subject to the progression clause and is therefore not taken into account when determining your personal tax rate.
As of: August 2013
Is the childcare allowance (Betreuungsgeld) unconstitutional?
Yes. In its ruling of 21 July 2015, the First Senate of the Federal Constitutional Court unanimously held that the federal government lacks legislative competence for the Betreuungsgeld. Sections 4a to 4d of the Federal Parental Allowance and Parental Leave Act, which established the entitlement, are therefore void.
As of: August 2015
Is leaving an unattended Advent wreath burning considered gross negligence?
Yes. The Higher Regional Court of Düsseldorf ruled in its decision of 31 May 1985 (4 U 259/84) that leaving candles on an Advent wreath burning unattended constitutes gross negligence. It represents both an objectively serious breach of the duty of care required in daily life and subjectively inexcusable misconduct.
As of: November 2012
Ist das Bundesmodell der Grundsteuer verfassungswidrig?
Zur Verfassungsmäßigkeit des Grundsteuer-Bundesmodells gibt es offene Verfahren — den aktuellen Stand und die Fundstelle finden Sie im Beitrag. (Quelle: Deubner Recht & Steuern)
As of: December 2025
Is payment for company advertising on an employee's private vehicle considered taxable wages?
According to the ruling of the FG Münster dated 03.12.2019 (Az. 1 K 3320/18 L), payments made by an employer for affixing license plate frames with company advertising to an employee's private vehicle constitute taxable wages subject to wage tax. The court held that the triggering factor for the payment is the employment relationship and thus the work activity, not an independent advertising interest.
As of: February 2020
Is the FG ruling on parking fines already final?
No, the FG Düsseldorf has allowed an appeal to the Federal Fiscal Court (BFH). Until a supreme court decision is issued, it remains open whether this view is generally applicable. Affected companies should keep comparable cases open where appropriate.
As of: January 2017
Is the non-deductibility of trade tax constitutional?
Yes. The BFH ruled in its decision dated 16 January 2014 (Az. I R 21/12) that the non-deductibility is compatible with the German Basic Law. According to the BFH, there is no violation of the principle of equal treatment.
As of: May 2014
Does refueling in lower-priced EU countries qualify as tax abuse?
According to the Düsseldorf Tax Court, this does not constitute tax abuse but merely the legitimate use of price differences between EU Member States. The free movement of goods and competition within the internal market argue against penalizing such arrangements for tax purposes. Transport companies may therefore generally take advantage of price benefits abroad.
As of: July 2013
Is the ruling by the FG Brandenburg final?
No, the FG Brandenburg has allowed an appeal. A final decision by the BFH is therefore still pending. Employers should nevertheless handle such arrangements cautiously and carefully review any multiple employment relationships with the same individual.
As of: February 2023
Is the ruling by the Fiscal Court of Düsseldorf on mediation proceedings final?
No, the Fiscal Court of Düsseldorf has admitted an appeal on points of law to the BFH. Until a decision by the highest court is reached, the tax recognition of mediation costs as extraordinary expenses (außergewöhnliche Belastung) is not conclusively settled. Taxpayers should therefore keep relevant cases open and, where appropriate, file an objection.
As of: December 2013
Is the ruling of the FG Münster final?
No, the FG Münster has allowed an appeal to the Bundesfinanzhof. A definitive ruling by the highest tax court is therefore still pending, so affected cases should be kept open where appropriate.
As of: October 2016
Is the FG Münster ruling on non-food withdrawals final and binding?
No, the FG Münster allowed an appeal and the case is now pending before the BFH. A final decision by the highest court is still outstanding. Affected taxpayers should therefore keep comparable assessments open and, where appropriate, refer to the pending BFH proceedings.
As of: August 2022