Exceptions to the Extended Trade Tax Deduction for Real Estate

Real estate and housing companies that exclusively manage their own real estate, for example in the form of rented apartments, can be operated largely free of trade tax — even when subject to trade tax due to their legal form (e.g. GmbH or GmbH & Co. KG) — by applying the so-called extended trade tax deduction for real estate. The prerequisite is that no commercial activity harmful to the deduction is carried out alongside the asset management. To date, the operation of renewable energy installations as well as the operation of charging stations for electric vehicles or electric bicycles has been considered non-harmful to the deduction, provided that the related income did not exceed 10% of the income from letting the entire real estate. Under the planned Wachstumschancengesetz (Growth Opportunities Act), this threshold is now to be raised to 20% of the total income from letting the real estate.