In response to the devastating damage caused by the severe weather in July of this year, the affected federal states have now adopted tax relief measures. The basis for this assistance is the disaster relief decree (Katastrophenerlass) issued by the respective tax authority.
- Reducing advance tax payments
Persons who have suffered substantial financial damage as a result of the flooding may apply to the competent tax office for a reduction of their advance tax payments. As a rule, proof that the applicant is affected is sufficient for the application. Reducing the tax burden is intended to help those affected repair the damage incurred more quickly without depleting their personal liquidity. A reduction of the tax burden is also available to affected businesses. In addition to the tax reduction, a deferral of advance payments until 31 January 2022 is also possible.
- Deduction of donations without a donation receipt
In order to promote the willingness of others to donate in the event of a disaster, donations may be deducted even without a donation certificate. Instead, a bank statement or cash deposit slip will suffice. However, this administrative relief applies only to donations made by 31 October 2021.
- Affected businesses: special depreciation and maintenance expenses
If the business building has been irreversibly damaged by the flooding, special depreciation of 30% is granted. The special depreciation may be claimed within the first three years after completion of the new business building. The amount may be spread across this period, provided the maximum limit of 30% is not exceeded. If the business building is only partially destroyed or damaged, maintenance expenses that would otherwise be immediately deductible may be claimed within the first three years up to a maximum of EUR 70,000. The same rules apply to movable assets, although the EUR 70,000 limit does not apply in that case.
- Businesses: damaged accounting records
The illegibility or loss of accounting records should be documented promptly and adequately so that those affected do not suffer any disadvantage. In the event of a tax audit, cash audit or similar inspection, it must be possible to demonstrate that the loss or damage to the documents occurred through no fault of the taxpayer.
- Extraordinary expenses in the tax return
The legislator also provides relief where affected persons have to bear the damage caused by the natural disaster themselves. In such cases, the costs incurred can be claimed as extraordinary expenses (außergewöhnliche Belastungen) provided they exceed the reasonable burden under § 33 Abs. 3 EStG. Only the amount not already covered by insurance compensation can be taken into account. This is intended to provide relief in particular for those affected who have no natural hazard or household contents insurance. Deductible costs include:
- Repair and replacement costs (apartment, furniture, household goods and clothing). Not deductible: car and garage
- Disposal costs
- Expert assessment costs
- Interest on a loan taken out due to the disaster
Frequently asked questions
Frequently asked questions
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.
Can donations for disaster relief be deducted without a formal donation receipt?
Yes, in the event of a disaster, a simplified payment record such as a bank statement or cash deposit slip is sufficient for claiming the donation deduction. A formal donation receipt (Zuwendungsbestätigung) is not required. However, this relief applies only for a limited period – in the case of the July 2021 flood, for donations made up to 31 October 2021.
What special depreciation applies to business buildings destroyed by a natural disaster?
In cases of irreparable damage to a business building, a special depreciation of up to 30% is granted. It can be claimed within the first three years after completion of the new building, with the option to spread it across this period. The overall cap of 30% must not be exceeded.
How are maintenance expenses treated for partially damaged business buildings?
If the business building is only partially destroyed, maintenance expenses can be claimed as immediately deductible within the first three years – up to a maximum limit of €70,000. The same rule applies to movable assets, but without the €70,000 cap.
Which storm damages are deductible as extraordinary expenses under § 33 EStG?
Deductible items include repair and replacement costs for the home, furniture, household goods, and clothing, as well as disposal expenses, appraisal fees, and interest on a disaster-related loan. Cars and garages do not qualify. Only the portion not covered by insurance and exceeding the reasonable burden threshold (zumutbare Belastung) can be claimed.