In its ruling of 4 February 2015 (Az.: 15 K 1779/14 E), the Finanzgericht Düsseldorf recognised pet care costs as expenses for household-related services, thereby contradicting the position of the tax authorities. The claimants keep a house cat in their flat. While away, they engaged an animal and home carer to look after the cat, who charged them €12 per day, totalling €302.90 in the year in dispute, 2012. The claimants paid the invoices by bank transfer. In their income tax return, they applied for a tax reduction for the use of household-related services. The tax office refused, citing the applicable circular issued by the BMF. This directive, which is binding on the tax office, excludes a tax reduction for costs relating to the care, grooming and veterinary treatment of pets. The Finanzgericht Düsseldorf granted the claim. Contrary to the view of the tax authorities, the care of pets has a close connection to the household of the keeper and is therefore covered by the tax relief for household-related services. Under this provision, on application, the assessed income tax is reduced by 20% (capped at €4,000) of the expenses for household-related services rendered within the taxpayer's household. The term "household-related service" is not defined further by statute. According to the case law of the highest courts, it covers household activities that are typically carried out by members of the private household or persons employed accordingly and that arise at regular intervals. In the view of the Finanzgericht Düsseldorf, this also includes services performed for the care and supervision of a pet that has been taken into the household. Cats that live in the keeper's home are to be attributed to the keeper's household. Activities such as cleaning the litter tray, providing food and water, and otherwise occupying the animal arise on a regular basis and are typically carried out by the keeper and their family. They therefore form part of the keeper's household activities. The Finanzgericht Düsseldorf has allowed an appeal on points of law to the BFH due to the fundamental importance of the case.
Frequently asked questions
Frequently asked questions
Are pet care costs tax-deductible?
Yes. According to the ruling of the Düsseldorf Tax Court of 4 February 2015 (Az. 15 K 1779/14 E), expenses for the care of a pet living in the household can be claimed as household-related services. The court thereby contradicts the previous view of the tax authorities, which excluded such costs. Upon application, the income tax is reduced by 20% of the expenses, up to a maximum of EUR 4,000 per year.
Why do pet care costs qualify as a household-related service?
Household-related services are domestic activities that are typically performed by members of the household and occur on a regular basis. According to the Düsseldorf tax court, tasks such as cleaning the litter box, providing food and water, and keeping the animal occupied meet these criteria. Since the pet is part of the owner's household, there is a close link to domestic activities.
What formal requirements must be met to deduct pet-care costs for tax purposes?
A proper invoice from the service provider is required, along with payment by bank transfer to the provider's account; cash payments are not accepted. In addition, the service must be performed within the taxpayer's household. In the case decided, the plaintiffs had transferred €302.90 and submitted a corresponding invoice.
How much is the tax reduction for household-related services?
Upon application, the income tax liability is reduced by 20% of the expenses for household-related services. The maximum deductible amount is €4,000 per year. Only labor costs are taken into account, not material costs.
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.