Household-related services do not qualify if the craftsman work is carried out in an external workshop.
This has now also been ruled by the Finanzgericht Rheinland-Pfalz in its judgment of 6 July 2016 (6.7.16, 1 K 1252/16).
The case concerned the renewal of upholstery and covering of a seating group. The furniture was collected by the interior decorator and restored in his workshop. The claimant couple applied for the tax reduction under § 35a (3) EStG for the costs incurred (approx. EUR 2,600). However, the tax office rejected the tax reduction, arguing that the law requires the craftsman work to be performed within the taxpayer's household.
The Finanzgericht concurred. In the court's view, craftsman work is only performed within the household if it is carried out within the spatial-functional area of the household. Even a nearby workshop (in this case approximately 4 km away) breaks the required direct spatial connection.
Whether a service qualifies for the tax benefit therefore clearly depends, among other things, on where it is actually performed. For example, pet care services are also only eligible if they take place within the taxpayer's own household. Since the tax reduction for household-related services is primarily intended to combat undeclared work, the legislator knowingly accepts such outcomes.
Frequently asked questions
Frequently asked questions
Are tradesman services performed in an external workshop eligible for tax relief under § 35a EStG?
No. Tradesman services qualify for tax relief under § 35a Abs. 3 EStG only if they are performed within the spatial and functional area of the taxpayer's household. If the service is carried out in the tradesman's workshop, the tax reduction does not apply. The Finanzgericht Rheinland-Pfalz confirmed this in its ruling of 06.07.2016 (Az. 1 K 1252/16).
Is a nearby workshop sufficient to establish a spatial connection with the household?
No. Even a workshop located only a few kilometers away does not meet the requirement of an immediate spatial connection to the household. In the case decided, a distance of 4 km already disqualified the taxpayer from claiming the tax reduction.
How were the upholstery works on a seating group performed in the workshop assessed for tax purposes?
The costs of around EUR 2,600 for renewing the upholstery and cover of a seating group, which the interior decorator had picked up and restored in his workshop, were not recognised as a household-related tradesperson service. The decisive factor was that the work was carried out outside the household.
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.
Why does the legislator tie the tax reduction to the place where the service is rendered?
The main purpose of the tax reduction for household-related services is to combat undeclared work in the domestic sphere. For this reason, the benefit is deliberately limited to services actually performed within the household, even though this can lead to strict outcomes in individual cases.