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 9 / 47
Can research funds be declared as tax-free by entering them in a remarks field of the tax return?
Simply entering research funds in a remarks field of the income tax return does not result in tax exemption. The tax authorities examine the factual connection to the professional activity and subject the funds to taxation if they are professionally motivated. A tax exemption must be based on statutory law and is generally not available in the context of a habilitation.
As of: August 2022
Following BFH case law on mixed expenses, can every celebration be apportioned?
No. While the BFH ruling of 21 September 2009 (GrS 1/06) generally permits the apportionment of mixed-purpose expenses, this requires objective allocation criteria and clear separability. According to the FG Baden-Württemberg, the costs of celebrations serving both a professional and a private occasion cannot be separated.
As of: April 2015
Can declining-balance depreciation continue after a special depreciation?
Yes. After a special depreciation ends – for example on newly built rental apartments – further depreciation can be based on the residual value and the applicable declining-balance rate. However, this requires that the asset was already being depreciated on a declining-balance basis before the end of the special depreciation period.
As of: December 2024
Can unused vacation be paid out after the end of the employment relationship?
Yes. If the employee was unable to take their vacation due to the termination of the employment relationship, they are entitled to financial compensation from the employer for the outstanding vacation days. This also applies if the employment relationship was previously suspended due to unpaid leave.
As of: August 2014
Can actual expenses be claimed instead of the flat rate?
Yes, higher actual business expenses may be claimed instead of the flat rate, provided they are supported by receipts. Please note, however, that no input VAT deduction is available for business expenses claimed on a flat-rate basis.
As of: December 2023
Can Section 35c EStG be combined with other incentives such as Section 35a EStG or KfW programs?
No, cumulation is not permitted. Anyone already claiming the tax benefit for listed buildings (Section 10f EStG) or for tradesman services (Section 35a EStG) for the same measure cannot additionally claim Section 35c EStG; however, for each individual measure there is an option to choose between Section 35a and Section 35c EStG. The tax reduction is also excluded if reduced-interest loans or tax-free grants (e.g., KfW) are used.
As of: September 2020
Can excessive alcohol consumption jeopardize accident insurance coverage at the Christmas party?
Yes, significant alcohol consumption can void coverage under the statutory accident insurance. If alcohol consumption is deemed the primary cause of the accident, the Berufsgenossenschaft (employers' liability insurance association) may refuse benefits.
As of: December 2016
Can Elterngeld and Betreuungsgeld be received at the same time?
Simultaneous receipt is only possible if the Elterngeld payments are spread over a two-year period. Otherwise, Betreuungsgeld can generally only be paid after the Elterngeld entitlement has ended.
As of: August 2013
Is a purchase contract concluded if an eBay auction is cancelled despite an existing bid?
No. According to the ruling of the OLG Hamm dated 04.11.2013 (Az. 2 U 94/13), no purchase contract is concluded if the seller legitimately cancels the auction due to an error in stating the minimum price. Under the eBay terms, the offer may be withdrawn in such cases, so that even an existing highest bid becomes void.
As of: January 2014
Could the purchase price for the goodwill of a medical practice be amortized for tax purposes?
Yes, the purchase price for the goodwill of a medical practice could previously be amortized for tax purposes over its useful life. This reduced the buyer's taxable profit in subsequent years. The amortization was a key tax advantage when acquiring a practice.
As of: April 2007
Will employees be able to draw their company pension in parallel with a partial pension in the future?
Yes, the Second Company Pension Strengthening Act (Zweites Betriebsrentenstärkungsgesetz) makes access to retirement benefits more flexible. Going forward, employees can draw their company pension as soon as they receive a partial pension from the statutory pension insurance. This facilitates a gradual transition into retirement.
As of: December 2024
Can employees in small businesses have an amended termination reviewed by a court?
Yes. In its ruling of 12 October 2015 (16 Sa 278/15), the LAG Hessen held that effective legal protection must allow judicial review of amended terminations even in small businesses. Otherwise, employees outside the scope of the KSchG would have no means of review, which would be incompatible with general protection against dismissal.
As of: March 2016
Can compensation payments in the context of a divorce be claimed as an extraordinary burden?
No, compensation payments do not qualify as an extraordinary burden. They are considered consideration, for example for the acquisition of co-ownership of real estate or for the settlement of other claims between the spouses. A tax deduction under § 33 EStG is therefore not possible.
As of: December 2014
Can construction contractors be retroactively subjected to VAT for construction services rendered to property developers?
According to a ruling of the Finanzgericht Berlin-Brandenburg dated 03.06.2015 (Az. 5 V 5026/15), retroactive assessment is ruled out for the time being. In the preliminary legal protection proceedings, the court granted suspension of enforcement, citing substantial constitutional concerns regarding § 27 Abs. 19 UStG. A definitive clarification remains subject to the main proceedings.
As of: June 2015
Can childcare costs paid to grandparents be deducted for tax purposes?
Yes, provided the grandparents do not live in the same household as the child, payments and travel cost reimbursements are deductible. A written childcare agreement is required, setting out remuneration and care times on arm's length terms. Care arranged within the family, such as by relatives or partners living in the same household, is not recognised.
As of: May 2022
Can data protection concerns eliminate the obligation to file electronic tax returns?
No. The Finanzgericht Rheinland-Pfalz ruled on 15 July 2015 (1 K 2204/13) that the residual risk of a hacker attack must be accepted after all technical security measures have been exhausted, given the public interest in administrative simplification and cost savings. Absolute data security does not exist in any case, since paper records can also be stolen, for example through burglary.
As of: September 2015
Can parents deduct their child's health and long-term care insurance contributions as special expenses?
Yes, parents can claim the health and long-term care insurance contributions of their dependent child as their own special expenses (Sonderausgaben) for tax purposes. The prerequisite is an existing maintenance obligation toward the child. The deduction is made as part of the pension and insurance expenses (Vorsorgeaufwendungen) in the parents' income tax return.
As of: September 2019
Können Empfänger der NRW-Soforthilfe freiwillig schon 2020 abrechnen?
Ja, das Land NRW eröffnet Soforthilfe-Empfängern Ende November per E-Mail die Möglichkeit, noch im laufenden Jahr abzurechnen und gegebenenfalls zu viel erhaltene Mittel zurückzuzahlen. Dies ist insbesondere für jene relevant, die die Rückzahlung steuerlich noch in 2020 geltend machen wollen. Mit einem Klick erhalten sie Zugriff auf die Berechnungshilfe und das Rückmelde-Formular.
As of: November 2020
Can heirs claim compensation for unused vacation of a deceased person?
Yes. According to a ruling by the ECJ dated 06.11.2018, a deceased employee's entitlement to financial compensation for unused paid annual leave generally passes to the heirs by way of succession. The heirs may demand financial compensation from the former employer for the outstanding vacation.
As of: November 2018
Can garden redesign costs be deducted as tradesperson services under § 35a EStG?
Yes. If a deduction under § 33 EStG is not possible — for example, because the reasonable burden threshold is not exceeded — the labor costs included in the tradesperson's invoice can be claimed at 20 % under § 35a EStG. The tax authorities have expressly recognized this. Material costs, however, are not eligible.
As of: June 2022
Can home emergency call systems qualify for tax relief in other configurations?
Yes. The BFH expressly left open the possibility that a tax reduction under § 35a Abs. 2 EStG may apply if the circumstances differ from the case decided. For example, if payment is not made for an external on-call service, or if the system includes immediate on-site assistance within the household, eligibility for tax relief must be assessed on a case-by-case basis.
As of: May 2023
Can a hobby room or guest room be deducted as a home office?
No. Rooms that are also used privately – such as hobby rooms or guest rooms – do not meet the criterion of near-exclusive professional use and therefore do not qualify as a tax-deductible home office.
As of: August 2016
Can childcare costs be deducted for tax purposes if paid in cash?
No. Childcare costs are only deductible as special expenses (Sonderausgaben) if payment is made by non-cash transfer to the caregiver's account. Cash payments are not recognised by the tax office, even if supported by receipts or witnesses. The BFH confirmed this in its ruling of 18 December 2014 (III R 63/13).
As of: June 2015
Can the costs of wastewater disposal be claimed as a household-related service?
Fees for municipal wastewater disposal are not eligible under § 35a Abs. 2 EStG. These charges finance services performed outside the household, namely the transport and treatment of wastewater as well as the construction and maintenance of municipal sewers. Only expenses incurred directly within your own household qualify under the tax authorities' official list.
As of: January 2023
Can tenants claim household-related services under § 35a EStG even if they did not enter into the contract themselves?
Yes. The BFH has ruled that tenants can claim the tax reduction under § 35a EStG even if the contract with the service provider or tradesperson was concluded by the landlord or property manager rather than by the tenant. The decisive factor is that the service is performed in the tenant's household and benefits the tenant.
As of: August 2023
Can mini-jobbers receive the tax-free Corona bonus without losing their mini-job status?
Yes. Under Section 1 (1) No. 1 of the Sozialversicherungsentgeltverordnung (Social Security Contribution Ordinance), the Corona bonus does not count as remuneration for social security purposes. It can therefore also be paid to marginally employed staff without affecting the EUR 450 threshold or jeopardising their mini-job status.
As of: September 2020
Can mini-jobbers work more hours under the new 520-euro threshold than before?
No, despite the increase the possible number of hours actually decreases slightly. At a minimum wage of 9.60 euros and a 450-euro threshold, around 46.9 hours per month were possible; at 12 euros and 520 euros, it is only about 43.3 hours. Mini-jobbers can therefore work roughly 3.5 hours less per month.
As of: March 2022
Can personnel costs be deducted when settling the Corona emergency aid?
Yes, personnel costs can be deducted retroactively from income, provided they were necessary to generate this income and were not covered by other benefits such as short-time work compensation (Kurzarbeitergeld). This adjustment was made because many businesses reopened after the easing of restrictions in May and June 2020, which would otherwise have resulted in calculated liquidity surpluses.
As of: August 2020
Can renovation costs for an owner-occupied home be deducted as extraordinary expenses?
Yes, under strict conditions. The BFH recognises renovation expenses as extraordinary expenses, provided they do not constitute routine repair and modernisation measures or the remedying of construction defects. As a rule, an unavoidable event or a concrete risk to health or to the habitability of the building must be present.
As of: May 2012
Can solo self-employed individuals apply for both Neustarthilfe and Überbrückungshilfe III?
No. Companies and solo self-employed individuals must choose between Neustarthilfe (restart aid) and Überbrückungshilfe III (bridging aid III). The decision should be made in consultation with a certified third-party reviewer, as the two programs cannot be claimed in parallel.
As of: April 2021
Can social security contributions be deferred due to coronavirus?
Yes, employers can apply for a deferral of social security contributions (health, unemployment, pension, and long-term care insurance) until June 2020. No deferral interest will be charged. The application should be submitted promptly, as contributions are regularly due on a monthly basis.
As of: March 2020
Can tax prepayments be reduced due to the Corona crisis?
Yes, applications can be filed to reduce or provisionally suspend ongoing prepayments for corporate income tax, trade tax, and personal income tax. These applications can be submitted electronically without complications and are generally processed by the tax authorities quickly and without issues.
As of: March 2020
Can criminal defense costs be deducted as business expenses or income-related expenses?
According to the BFH, a deduction under § 4 Abs. 4 EStG (business expenses) or § 9 Abs. 1 EStG (income-related expenses) is not permitted if the costs cannot be clearly attributed to the business or professional sphere. In cases of intentional offenses, this clear causal connection is generally lacking.
As of: September 2013
Can students and pensioners apply for the Corona emergency aid?
Yes, status as a student or pensioner is irrelevant. What matters is that the person was active in the market as a self-employed entrepreneur on 31 December 2019 and is independently carrying out a commercial or professional activity within the meaning of § 2 UStG at the time of application.
As of: March 2020
Can taxi costs for trips to the primary place of work be deducted beyond the commuter allowance?
No. According to BFH case law, a taxi does not qualify as public transport, so trips between home and the primary place of work by taxi are only deductible at the commuter allowance rate (€0.30 per kilometer of distance in the years in dispute). The option under § 9 Abs. 2 S. 2 EStG to deduct higher actual costs does not apply.
As of: December 2022
Can renovation costs for age-appropriate living be claimed for tax purposes?
Yes, home renovation costs can be deducted as außergewöhnliche Belastungen (extraordinary expenses) if they are exclusively necessitated by illness or disability. The costs must be reasonable and customary for age-appropriate or disability-accessible features. This applies to both new builds and the renovation of existing homes.
As of: November 2019
Can relocation expenses be claimed without receipts?
Yes, for miscellaneous relocation expenses you may choose between itemized proof and the flat-rate amount under the Bundesumzugskostengesetz (BUKG, German Federal Relocation Expenses Act). Transport costs, travel expenses, rent compensation and broker fees, however, must generally be substantiated by receipts.
As of: August 2021
Can maintenance payments for one's own children be deducted for tax purposes?
Maintenance payments for one's own children can only be claimed as an extraordinary expense (außergewöhnliche Belastung) if neither child benefit (Kindergeld) nor the child tax allowance (Kinderfreibetrag) is claimed for the child. In all other cases, maintenance payments are already covered for tax purposes by Kindergeld or the Kinderfreibetrag.
As of: April 2021
Can accommodation costs be deducted if the employer provides company housing?
Yes, provided the employee actually bears a financial burden, for example through a company housing charge withheld from their salary. If, however, the costs are fully reimbursed by the employer or the housing is provided free of charge, a deduction as work-related expenses is not possible.
As of: November 2023
Can those affected by storm damage have their tax prepayments reduced?
Yes, affected private individuals and businesses can apply to the competent Finanzamt (tax office) for a reduction of their tax prepayments. As a rule, proof of being affected is sufficient for the application. Alternatively, a deferral of the prepayments is also possible — in the case of the July 2021 storm, until 31 January 2022.
As of: October 2021
Can consumer and home construction loans be deferred during the coronavirus crisis?
Yes. Consumer loans and home construction loans with installments due within a defined period can be deferred for up to six months. Payments need not be made during this time but can be settled later. Landlords facing liquidity problems due to rental losses can also temporarily defer their construction loans without paying interest or principal.
As of: March 2020
Can payments to a school support association be deducted as tuition fees?
According to a ruling by the FG Münster (Münster Tax Court), payments to a school support association (Förderverein) can also qualify as tuition fees for the purpose of special expense deductions, provided that the funds cover school-related costs and are forwarded accordingly. The decisive factor is not the label "tuition fee" but whether the costs are school expenses that would otherwise be publicly funded at state schools. A final decision by the BFH is still pending.
As of: February 2024
Can a proportional deduction be claimed for rooms used partly for private purposes when a home office already exists?
No, a proportional deduction is not permitted. The BFH has clarified that substantial private use entirely precludes the deduction as business expenses or income-related expenses. Splitting the costs according to usage shares is also ruled out.
As of: August 2016
Can follow-up costs such as tiles, doors, and fittings for disability-accessible remodeling also be deducted for tax purposes?
Yes, necessary follow-up costs for materials damaged by the remodeling or that must be adapted to the new conditions are also deductible. This includes, for example, wall tiles, doors, and fittings affected by the removal of the old shower tray. Itemization of individual expense components is not required.
As of: May 2015
Can entrepreneurs from other EU countries also use the German small business regulation (Kleinunternehmerregelung)?
Yes, as of 1 January 2025, entrepreneurs established in other EU member states may also apply the Kleinunternehmerregelung in Germany. Conversely, German entrepreneurs can use the VAT exemption in other EU countries, but they must participate in a special notification procedure with the Bundeszentralamt für Steuern (Federal Central Tax Office) and report their turnover electronically on a quarterly basis.
As of: December 2024
Can beA and beSt still be used for communication with the tax office?
No. The special electronic mailboxes for attorneys and tax advisors (beA and beSt) are generally excluded from communication with the tax authorities. However, their use remains mandatory in court proceedings.
As of: December 2024
Can actual income-related expenses exceeding the saver's lump-sum allowance be deducted from capital income?
As a rule, the deduction of actual income-related expenses on capital investment income is excluded, since the saver's lump-sum allowance of EUR 801 covers all such expenses. However, according to a ruling of the FG Baden-Württemberg (9 K 1637/10), deducting actual costs may be possible in exceptional cases where the individual tax rate—after applying the lump-sum allowance—is already below the flat withholding tax rate of 25%.
As of: February 2013
Can the relief provisions for multiple company cars also be applied retroactively to prior years?
Yes, retroactive application is possible if the tax assessment is still subject to review under § 164 AO or the appeal period has not yet expired. In such cases, it should be examined whether an amendment request can be filed in favor of the taxpayer. A review is particularly worthwhile when several business vehicles have previously been taxed under the flat 1% rule.
As of: November 2012
Can individual electrical appliances be immediately deducted as low-value assets?
Under the new BFH case law, a fitted kitchen is treated as a single uniform asset, so individual appliances generally cannot be written off separately under the low-value asset (GWG) threshold. However, freestanding electrical appliances that are not permanently integrated may be assessed separately if they do not form part of the uniform asset 'fitted kitchen'.
As of: December 2016
Can high extraordinary expenses be spread over several years on equitable grounds?
No. In its ruling of 23 April 2015 (3 K 1750/13), the Tax Court of Baden-Württemberg held that high extraordinary expenses cannot be allocated across multiple assessment periods, even if they do not produce a full tax effect in the year of payment. The cash outflow principle and the principle of annual assessment are decisive. An appeal against this decision is pending before the BFH under Az. VI R 36/15.
As of: August 2015