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 7 / 47
Is the ruling of the Münster Tax Court on vehicle advertising already final?
No, the Münster Tax Court has allowed an appeal to the Federal Fiscal Court (BFH). Until a supreme court decision is issued, employers should place particular emphasis on a clear, advertising-oriented contractual structure for comparable advertising agreements with employees in order to minimise the risk of reclassification as wages.
As of: February 2020
Is the ruling on renovation costs for leased businesses final?
No, the ruling by the FG Rheinland-Pfalz is not final. The tax office has filed an appeal with the BFH. A final decision by the highest court is still pending, so the legal situation in comparable cases remains uncertain.
As of: February 2022
Is the ruling on two home offices final?
No, the ruling of the Finanzgericht Rheinland-Pfalz dated 25.02.2015 (Az. 2 K 1595/13) is not final. Due to its fundamental significance, an appeal to the Bundesfinanzhof was admitted, as it has not yet been clarified at the highest judicial level whether the maximum amount may be deducted once or twice when two home offices in two households are used.
As of: April 2015
Is the ruling on the tax deductibility of pet care costs final and binding?
No. Due to its fundamental importance, the FG Düsseldorf allowed an appeal to the BFH. Until the BFH issues its decision, the tax authorities remain bound by the BMF circular, which excludes a tax reduction for pet care costs. Affected taxpayers should therefore keep their tax assessments open and refer to the pending proceedings.
As of: April 2015
Is the civil servant death benefit subject to income tax?
Yes, according to the BFH ruling (Az. VI R 8/19), the civil servant death benefit qualifies as taxable income from employment under § 19 EStG. The payout is therefore reduced by income tax and the solidarity surcharge.
As of: September 2021
Does merely picking up a mobile phone while driving already constitute prohibited use under § 23a Abs. 1a StVO?
No. According to the ruling of the OLG Köln dated 07.11.2014, simply picking up and repositioning a mobile phone does not constitute prohibited use within the meaning of § 23a Abs. 1a StVO. Such a mere change of location has no connection to the device's functionality and is to be assessed no differently than moving any other object within the vehicle.
As of: December 2014
Has the final word been spoken on provisions for follow-up servicing?
No. The Münster Tax Court allowed an appeal against its decision due to the fundamental significance of the matter. In addition, another case concerning the requirements for a contractual follow-up servicing obligation is pending before the BFH (Az. IV R 34/14). Affected insurance agents should monitor further developments.
As of: December 2016
Is the profit from selling the furniture of a rented holiday apartment taxable?
No, the portion of the profit attributable to the furniture is not subject to speculative taxation. Furniture and furnishings are considered assets for everyday use, which typically lose value and have no potential for appreciation. Under § 23 EStG, such items are expressly exempt from taxation on private sales transactions, even if they were used for rental purposes.
As of: January 2021
Are the vacation entitlements of a deceased employee inheritable?
Yes. According to a ruling by the European Court of Justice, vacation entitlements do not expire upon the death of an employee but can be claimed by the heirs as a financial settlement. With this decision, the ECJ overturned the previously prevailing case law in Germany, under which all vacation entitlements lapsed upon death.
As of: July 2014
Is the venue decisive for insurance coverage at a company event?
No, the specific location of the event is not the determining factor. What matters is that it is an official company event in which employees participate as part of their work-related activities.
As of: December 2016
Is the sale of a private collection via eBay subject to tax?
Yes, if sales are continuous and substantial in scope, they may be subject to income tax and VAT. The Fiscal Court of Cologne (judgment of 04.03.2015, 14 K 188/13) ruled that long-term and intensive selling activities lead to classification as an entrepreneur and commercial trader. The decisive factors are the scope, duration and frequency of the sales as well as the sales organisation.
As of: May 2015
Is the sale of a co-ownership share to the ex-partner taxable?
Yes. If less than 10 years lie between acquisition and disposal, the gain is taxable as a private disposal transaction under § 23 Abs. 1 S. 1 Nr. 1 EStG. The BFH confirmed this for a divorce case in its ruling of 14.02.2023 (IX R 11/21). A tax exemption only applies if the requirements for use for own residential purposes are met.
As of: August 2023
Is the sale of an owner-occupied home with a home office subject to tax if sold within the 10-year period?
According to the ruling of the Fiscal Court of Cologne dated 20 March 2018 (Az. 8 K 1160/15), the capital gain from the sale of an owner-occupied home is fully tax-exempt even if income-related expenses for a home office were previously claimed. The court reasoned that a home office integrated into the private living area does not constitute an independent economic asset. A proportional taxation under § 23 Abs. 1 Nr. 1 S. 3 EStG therefore does not apply.
As of: June 2018
Is the capital gains allowance also available if the business was previously leased?
Yes, according to BFH case law (ruling of 13 March 1986, IV R 176/84), the allowance is available to the taxpayer even if the business was first leased and only sold after expiry of the lease agreement. The prerequisite is that the lease was entered into for health reasons and that the sale takes place after the continued occupational disability has been established with certainty.
As of: November 2022
Is input VAT deduction from a company event possible if the 110-euro threshold is exceeded?
No. According to recent case law, the employer is not entitled to deduct input VAT on the costs of a company event if the threshold of 110 euros per participant is exceeded. In return, however, no VAT has to be paid on the withdrawal or free benefit provided to the employees.
As of: October 2012
Is the 1% rule for company cars constitutionally permissible?
Yes, the BFH confirmed in its ruling of 13 December 2012 (Az. IV R 51/11) that the 1% rule is constitutionally sound. The fact that gross list prices are often undercut by discounts in practice does not change this assessment.
As of: February 2013
Is the 30% reduction of business entertainment expenses constitutional?
The Finanzgericht Baden-Württemberg expressed doubts about the constitutionality of this reduction in its ruling of 26 April 2013 (Az. 10 K 2983/11), particularly regarding the decrease from 80% to 70% in 2004. The matter was referred to the Bundesverfassungsgericht for a decision (Az. 2 BvL 4/13).
As of: March 2014
Can the 60-square-metre threshold be applied to foreign secondary residences in cases of dual household maintenance?
No. The BFH has ruled that the 60-square-metre standard, recognised on social-law grounds, applies only to domestic residences. For foreign residences, country-specific conditions must be taken into account, since German authorities cannot reliably determine average rents based on foreign standards.
As of: November 2023
Is the interpretation regarding wage levels in cases of termination during short-time work legally binding?
No. There is currently neither a clear statutory basis nor recent court rulings specifically addressing this constellation. The interpretation that only the reduced wage is owed is a legal assessment and may be evaluated differently by a court in individual cases.
As of: March 2021
Is the taxation of pensions always a disadvantage?
Not necessarily. In many cases, income in retirement is lower than during working life, so a lower personal tax rate applies. As a result, the tax burden on the pension can be moderate. An individual review, ideally with a Steuerberater (German Certified Tax Advisor), is nevertheless advisable.
As of: November 2014
Is the classification under motor vehicle tax law or road traffic law decisive for the 1% rule?
No. In its reasoning, the BFH makes clear that the classification under motor vehicle tax law or road traffic law is not decisive for the income tax assessment. The sole determining factor is the objective design and equipment of the vehicle.
As of: September 2016
Is registration in the Transparency Register subject to a fee?
No, entries in the Transparency Register are free of charge. Emails demanding a paid registration do not originate from the official authority and should be regarded as fraud attempts.
As of: January 2020
Is the ruling on car lease payments under salary conversion already final?
No. The Tax Court of Berlin-Brandenburg granted leave to appeal to the BFH due to the matter's fundamental importance. Affected taxpayers should therefore keep comparable cases open and file an objection referencing the pending appeal proceedings until the BFH issues its final decision.
As of: June 2016
Is it permissible to record EC card transactions in the cash book?
No. According to the BMF letter dated 29 June 2018, recording EC card transactions in the cash book constitutes a formal deficiency. The cash book may only contain cash transactions, as it serves to document the current cash balance. This applies both retroactively and going forward.
As of: July 2018
Is the distance-learning university the primary place of work in a part-time distance-learning programme?
According to the Lower Saxony Tax Court (Niedersächsisches FG), a distance-learning university does not qualify as the primary place of work in a pure part-time distance-learning programme. The court reasoned that full-time studies require a workload of roughly 40 hours per week, whereas part-time studies only involve about 20 hours per week. Travel expenses are therefore not limited to the standard commuting allowance (Entfernungspauschale).
As of: June 2022
Has the question of the relevant cut-off date for purchase price allocations been clarified by the highest courts?
No, the legal question has not yet been conclusively clarified. The Münster Tax Court expressly allowed an appeal due to differing views on the relevant cut-off date. Taxpayers should therefore keep corresponding assessment notices open where appropriate.
As of: January 2023
Is the five-year period under § 35b EStG constitutional, even if it results in double taxation?
Yes, the BFH considers the rigid five-year period to be constitutionally permissible. It is accepted that a double burden of inheritance tax and income tax cannot be avoided in every individual case.
As of: May 2024
Is trade tax deductible as a business expense for corporations?
No. Since the Corporate Tax Reform Act 2008, trade tax (Gewerbesteuer) is no longer a deductible business expense by law. While it reduces profit under commercial law, it may not be deducted from the assessment base for corporate income tax when determining taxable profit.
As of: May 2014
Does sharing a household with an adult disqualify you from the relief amount?
As a rule, living together with another adult excludes the relief amount (§ 24b Abs. 3 S. 1 EStG). An exception applies if the other person is your own biological, adopted, foster, step, or grandchild for whom child benefit or a child allowance is granted. According to the Ministry of Finance of Schleswig-Holstein, hosting an adult refugee in the household is also not detrimental.
As of: February 2023
Is pet care eligible as a household-related service?
Pet care only qualifies for the tax reduction under § 35a EStG if it takes place within the taxpayer's own household. If the animal is cared for outside the household, for example in a boarding kennel, the tax reduction does not apply.
As of: August 2016
Is the new regulation on the primary place of work constitutional?
Yes. The BFH has confirmed the reform of the travel expense rules as constitutional. The legislator did not exceed its regulatory discretion, since employees can adjust to the consistently same commuting routes and thereby reduce their travel costs.
As of: July 2019
Is the use of the Dash Button subject to certain conditions?
Yes. Using the Dash Button requires a paid Amazon Prime membership, a smartphone with the Amazon app installed, and Wi-Fi access. Consumer protection authorities view this bundling critically, along with the data-intensive app and its integration with smart devices.
As of: September 2016
Is providing parking spaces to hotel guests an ancillary service to the accommodation?
No, the BFH rejected this classification. Although the tax court initially considered it an ancillary service to lodging, the BFH treats the provision of parking as a separate service subject to the standard 19% VAT rate. This applies in particular when the parking spaces are also available to non-overnight guests.
As of: July 2016
Is the flat-rate tax under § 37b EStG on gifts deductible as a business expense?
According to the FG Niedersachsen (judgment of 16/01/2014, Az. 10 K 326/13), the flat-rate tax under § 37b EStG on gifts to business associates is not deductible as a business expense if the gift itself exceeds the 35 euro threshold. The flat-rate tax shares the tax treatment of the gift and is therefore subject to the deduction prohibition under § 4 Abs. 5 Satz 1 Nr. 1 EStG. While it qualifies as a business expense under commercial law, it may not reduce taxable income.
As of: March 2014
Is the obligation to file tax returns electronically constitutional?
Yes. The BFH has already ruled with respect to VAT that the obligation to file electronically is constitutional, despite incidents such as the NSA affair. This assessment is applied to income tax returns as well, so no constitutional concerns prevail in that context either.
As of: September 2015
Is a company's rating score permanently fixed?
No, the rating score is not a rigid figure. Through rating-oriented corporate management and targeted balance sheet measures, management can actively influence the outcome. A direct dialogue with the bank representative helps identify specific areas for improvement.
As of: December 2020
Has the legal question of distance learning as a primary place of activity been definitively resolved?
No, a final resolution is still pending. An appeal against the ruling of the Lower Saxony Tax Court is currently before the BFH, and its decision remains to be seen. Affected taxpayers should keep relevant tax assessments open where appropriate.
As of: June 2022
Are the graduated notice periods under § 622 Abs. 2 BGB age-discriminatory?
No. The Federal Labor Court ruled on 18 September 2014 (6 AZR 636/13) that notice periods graduated by length of service do not constitute unlawful indirect age discrimination. While younger employees are effectively disadvantaged, the provision pursues a legitimate aim.
As of: December 2014
Is the tax exemption for photovoltaic systems an allowance or a threshold?
It is a threshold (Freigrenze), not an allowance (Freibetrag). This means: if the permitted capacity limit is exceeded, the tax exemption is lost in full, not just for the portion exceeding the limit. This clarification has now been formally codified in law.
As of: December 2024
Is a panel doctor licence (Vertragsarztzulassung) a depreciable asset?
In principle, the Vertragsarztzulassung is a strictly personal, public-law status right and cannot be transferred directly. It only qualifies as an independent, intangible and depreciable asset if the licence alone is the subject of the purchase agreement. In this specific case, depreciation is permissible.
As of: May 2017
Has the analogous application of the EUR 40 threshold to business associates been conclusively settled?
A final clarification is still pending. The BFH is addressing this question in a pending appeal under case no. VI R 56/11, namely whether the rule also applies to gifts to business associates. Until then, the administrative view coordinated between the federal government and the federal states applies.
As of: August 2013
Is the extended trade tax deduction available in a reverse business split (umgekehrte Betriebsaufspaltung)?
Yes. The BFH has ruled that real estate companies may apply for the extended trade tax deduction under § 9 No. 1 Sentence 2 GewStG even in cases of a reverse business split. A genuine commercial activity cannot be inferred from this structure, so the deduction is not precluded.
As of: June 2024
Is the planned income tax exemption for photovoltaic systems an election?
According to the current view in the literature, the tax exemption is to be mandatory and therefore does not constitute an election. If the relevant capacity thresholds are not exceeded, no profit needs to be determined.
As of: October 2022
Is the private use of a company smartphone exempt from wage tax?
Yes, under § 3 No. 45 EStG, the private use of a company mobile phone provided by the employer, including the connection and basic fees covered by the employer, is tax-free. The exemption applies regardless of the extent of private use. The prerequisite is that the device is owned by the employer as company property.
As of: February 2023
Is the preferential tax treatment of business assets constitutional?
The Federal Constitutional Court has held that the preferential tax treatment for the transfer of business assets is, in principle, compatible with the German Basic Law. This is justified in particular by the protection of jobs, which the preferential treatment is intended to safeguard.
As of: December 2014
Is the provision of practice rooms by a physician to other physicians subject to VAT?
Yes. According to the ruling of the FG Münster of 02.08.2015 (Az. 15 K 718/12 U), the provision of practice rooms including equipment to other physicians constitutes neither a medical nor a quasi-medical service. As no VAT exemption under § 4 Nr. 14 UStG applies, these services are subject to VAT.
As of: October 2016
Is the transfer from an individual account to a spouse subject to gift tax?
Yes. According to the BFH ruling of 29 June 2016 (II R 41/14), transferring assets from one spouse's individual account or securities deposit to the other spouse generally constitutes a gratuitous gift and is subject to gift tax. This applies even if the spouses consider the assets to be jointly owned in economic terms.
As of: September 2016
Ist doppelte Haushaltsführung auch im Einpersonenhaushalt möglich?
Auch Alleinstehende können eine doppelte Haushaltsführung geltend machen — unter welchen Voraussetzungen, steht im Beitrag. (Quelle: Deubner Recht & Steuern)
As of: December 2025
Is an appraisal under ImmoWertV permissible for determining the remaining useful life?
According to BFH case law, the building cost valuation method under the Real Estate Valuation Ordinance (ImmoWertV) is not explicitly intended for determining the actual remaining useful life. However, it may serve as a suitable basis for estimation in individual cases and can be recognized by the tax court.
As of: March 2023
Is a freelance physician (anaesthetist) working in a hospital subject to social security contributions?
Yes. According to the ruling of the Hessisches Landessozialgericht of 22 August 2017 (Az. L 1 KR 394/15), a specialist in anaesthesiology working in the operating theatre of a hospital is generally considered to be in dependent employment and is therefore subject to social security contributions. This results in mandatory insurance in the statutory pension scheme and under unemployment insurance law.
As of: August 2017