All contributions are compiled to the best of our knowledge. However, no liability or guarantee can be accepted for their content. Due to the partially abbreviated representations and the individual characteristics of each individual case, the explanations cannot and should not replace personal advice.
2024
Themen aus dem Steuerrecht
September 2024
September 2024
Corona economic aid: Last deadline for final settlement ends on 30.9.2024
With the Corona economic aid, e.g. bridging, November and December aid, companies and self-employed people were supported from federal funds between June 2020 and June 2022 if they had experienced a significant drop in sales.
In order to help companies quickly during the pandemic and to secure their existence, the funds should be paid out as quickly as possible. The approval and payment of the funds was therefore mostly provisionally based on a forecast. It was planned to subsequently compare the forecast figures with the actual sales development and the fixed costs incurred. This comparison is done by submitting a so-called final statement. Both the application and the final statement are made by a “third-party auditor”, usually the tax advisor.
After the deadline for preparing and submitting the final statement had been postponed several times, it now finally expires on September 30, 2024.
It has happened that applications for Corona economic aid were either submitted via various third-party auditors, for example because the tax advisor changed between several applications, the tax advisor was no longer available in the meantime, or in the case of several companies in an affiliated company, the applications were submitted by different tax advisors for the individual companies.
The final settlement, however, must be carried out or submitted by a single third-party auditor, if necessary by changing. The new third-party auditor must apply for the change on the application platform itself. This is not the responsibility of the company or the self-employed person. However, all the necessary information and data from the documents already submitted must be made available to the tax advisor taking over.
It is also possible to change tax advisors after the final settlement has been made. However, the advisor must be informed of the billing number of the final settlement package or the customer number of the organizational profile. Otherwise, a change is not possible.
Attention: If no final accounts have been submitted on time by September 30, 2024, the responsible approval authorities are required to immediately initiate recovery measures for the full amount of the aid provided to the companies and self-employed persons.
September 2024
Reporting obligation for electronic cash registers and other basic recording systems from 1.1.2025
The Federal Ministry of Finance has now announced in several letters that the reporting requirement for electronic cash register systems with a technical security device (TSE) will begin on January 1, 2025. Reporting and transmission is carried out separately for each business location within one month of acquisition, start or end of leasing or decommissioning with an officially prescribed data set via ELSTER with the following information:
Name and tax number of the taxpayer
Type of certified technical security device (TSE)
Type, number and serial number of the electronic recording system(s) used
Date of acquisition or final decommissioning or use in another business location
For cash registers acquired before July 1, 2025, reporting must be made by July 31, 2025; for cash register systems acquired from July 1, 2025 and decommissioning, the one-month deadline applies. The same applies to taximeters and odometers with TSE. The vehicle registration number must also be reported here. Without a TSE, these may still be used until December 31, 2025. Affected companies should already compile the necessary data and obtain an overview of all systems used in their premises.
September 2024
Is property valuation in the federal model illegal? Financial authorities react with state decree
From January 1, 2025, the property tax for real estate will be levied according to a changed assessment basis, which is currently being newly determined for all properties in Germany and communicated to the property owners. The federal states have opted for different valuation models.
One of these models, the so-called “federal model”, is the subject of several legal proceedings. The Finance Court of Rhineland-Palatinate (FG) has decided to suspend enforcement in interim legal protection proceedings. The Federal Finance Court (BFH) has confirmed this decision. The decision in the main proceedings is still pending.
A suspension of enforcement will only be granted if there are serious doubts about the legality of the decision.
The FG and the BFH have doubts under ordinary law and constitutional law about the valuation rules to be applied to determine property values, in particular when the law determines the property value in a typical manner, without the legally regulated possibility of a property owner providing case-by-case evidence that his property value is 40% or more lower than the determined value.
The financial authorities of the affected federal states have responded to these provisional decisions with a joint state decree. This now stipulates that property owners are entitled to provide evidence of a lower value of the property. This will be taken into account if an appointed or certified appraiser or the appraisal committee determines this lower value or if a purchase price that is at least 40% lower is achieved in normal business transactions within one year before or after the main assessment date. The same applies to land subject to building leases.
The decrees are to be applied to all decisions that are not yet final, and also to final value updates if the deviation is greater than €15,000.
Berlin, Brandenburg, Bremen, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Saarland (with deviations), Saxony (with deviations), Saxony-Anhalt, Schleswig-Holstein and Thuringia have opted for the federal model for property valuation.
In these federal states, the tax authorities should grant objections with applications for suspension of execution for an appropriate period of time without obtaining an expert opinion from the owner if the information on the value is conclusive. An expert opinion may have to be obtained later. Affected property owners should seek advice in the specific case to determine the chances of success.
Attention: It is important that an objection is raised against the basic notice (the first notice!) within one month of delivery and not against the property tax assessment notice or the notice with which the city/municipality collects the property tax.
September 2024
BFH has concerns about the restriction of loss deductions in forward transactions
Income from capital assets is subject to tax with considerable difficulties in the area of loss offsetting. A double loss offset restriction has been in force since 2021, especially for capital gains from futures transactions.
This means that such losses can only be offset against profits from other futures transactions or option premiums. Offsetting with other capital income is not possible. Loss offsetting is also only possible up to €20,000 per assessment year. Remaining losses can be carried forward to subsequent years for an unlimited period of time.
Tax is automatically deducted from domestic income from futures transactions. Losses are certified to the taxpayer by the bank; offsetting can only be claimed in the tax assessment, as can loss carryforwards.
For example, if you make a profit of €10,000 (before tax deduction) from dividends and a profit of €30,000 (before tax deduction) from a forward transaction, but a loss of €40,000 from another forward transaction, your bottom line is financially zero.
For tax purposes, it is not possible to offset the loss from the forward transaction against the profit from dividends, and the loss of €40,000 against the profit of €30,000 can only be offset to the amount of €20,000. For tax purposes, the taxpayer is therefore left with a profit from capital gains of €20,000 (€10,000 from dividends and €10,000 from forward transactions). Only an amount of €20,000 from the loss on the forward transaction can be taken into account for tax purposes in the relevant assessment year, the remaining €20,000 can only be offset against positive income from forward transactions in the future, with the risk of total loss if no more profits are made.
A married couple subject to tax did not agree with this restriction on the offsetting of losses. After an unsuccessful appeal against the income tax assessment and the rejection of the suspension of enforcement by the responsible tax office, they were given the right in interim legal protection proceedings before both the Rhineland-Palatinate Finance Court and the Federal Finance Court (BFH), and enforcement was temporarily suspended.
The BFH has also already seen constitutional concerns due to a possible violation of the principle of equal treatment if profits not economically achieved are taxed. A similar procedure is still pending to take into account losses on the sale of shares. Since the Federal Constitutional Court will probably be called upon in the end, a final decision will take several years.
Taxpayers should therefore keep open any decisions that are not yet legally binding and seek advice from their tax advisor for this purpose.
September 2024
Corona economic aid: Last deadline for final settlement ends on 30.9.2024
With the Corona economic aid, e.g. bridging, November and December aid, companies and self-employed people were supported from federal funds between June 2020 and June 2022 if they had experienced a significant drop in sales.
In order to help companies quickly during the pandemic and to secure their existence, the funds should be paid out as quickly as possible. The approval and payment of the funds was therefore mostly provisionally based on a forecast. It was planned to subsequently compare the forecast figures with the actual sales development and the fixed costs incurred. This comparison is done by submitting a so-called final statement. Both the application and the final statement are made by a “third-party auditor”, usually the tax advisor.
After the deadline for preparing and submitting the final statement had been postponed several times, it now finally expires on September 30, 2024.
It has happened that applications for Corona economic aid were either submitted via various third-party auditors, for example because the tax advisor changed between several applications, the tax advisor was no longer available in the meantime, or in the case of several companies in an affiliated company, the applications were submitted by different tax advisors for the individual companies.
The final settlement, however, must be carried out or submitted by a single third-party auditor, if necessary by changing. The new third-party auditor must apply for the change on the application platform itself. This is not the responsibility of the company or the self-employed person. However, all the necessary information and data from the documents already submitted must be made available to the tax advisor taking over.
It is also possible to change tax advisors after the final settlement has been made. However, the advisor must be informed of the billing number of the final settlement package or the customer number of the organizational profile. Otherwise, a change is not possible.
Attention: If no final accounts have been submitted on time by September 30, 2024, the responsible approval authorities are required to immediately initiate recovery measures for the full amount of the aid provided to the companies and self-employed persons.
All contributions are compiled to the best of our knowledge. However, no liability or guarantee can be accepted for their content. Due to the partially abbreviated representations and the individual characteristics of each individual case, the explanations cannot and should not replace personal advice.
2024
Themen aus dem Steuerrecht
September 2024
September 2024
Corona economic aid: Last deadline for final settlement ends on 30.9.2024
With the Corona economic aid, e.g. bridging, November and December aid, companies and self-employed people were supported from federal funds between June 2020 and June 2022 if they had experienced a significant drop in sales.
In order to help companies quickly during the pandemic and to secure their existence, the funds should be paid out as quickly as possible. The approval and payment of the funds was therefore mostly provisionally based on a forecast. It was planned to subsequently compare the forecast figures with the actual sales development and the fixed costs incurred. This comparison is done by submitting a so-called final statement. Both the application and the final statement are made by a “third-party auditor”, usually the tax advisor.
After the deadline for preparing and submitting the final statement had been postponed several times, it now finally expires on September 30, 2024.
It has happened that applications for Corona economic aid were either submitted via various third-party auditors, for example because the tax advisor changed between several applications, the tax advisor was no longer available in the meantime, or in the case of several companies in an affiliated company, the applications were submitted by different tax advisors for the individual companies.
The final settlement, however, must be carried out or submitted by a single third-party auditor, if necessary by changing. The new third-party auditor must apply for the change on the application platform itself. This is not the responsibility of the company or the self-employed person. However, all the necessary information and data from the documents already submitted must be made available to the tax advisor taking over.
It is also possible to change tax advisors after the final settlement has been made. However, the advisor must be informed of the billing number of the final settlement package or the customer number of the organizational profile. Otherwise, a change is not possible.
Attention: If no final accounts have been submitted on time by September 30, 2024, the responsible approval authorities are required to immediately initiate recovery measures for the full amount of the aid provided to the companies and self-employed persons.
September 2024
Reporting obligation for electronic cash registers and other basic recording systems from 1.1.2025
The Federal Ministry of Finance has now announced in several letters that the reporting requirement for electronic cash register systems with a technical security device (TSE) will begin on January 1, 2025. Reporting and transmission is carried out separately for each business location within one month of acquisition, start or end of leasing or decommissioning with an officially prescribed data set via ELSTER with the following information:
Name and tax number of the taxpayer
Type of certified technical security device (TSE)
Type, number and serial number of the electronic recording system(s) used
Date of acquisition or final decommissioning or use in another business location
For cash registers acquired before July 1, 2025, reporting must be made by July 31, 2025; for cash register systems acquired from July 1, 2025 and decommissioning, the one-month deadline applies. The same applies to taximeters and odometers with TSE. The vehicle registration number must also be reported here. Without a TSE, these may still be used until December 31, 2025. Affected companies should already compile the necessary data and obtain an overview of all systems used in their premises.
September 2024
Is property valuation in the federal model illegal? Financial authorities react with state decree
From January 1, 2025, the property tax for real estate will be levied according to a changed assessment basis, which is currently being newly determined for all properties in Germany and communicated to the property owners. The federal states have opted for different valuation models.
One of these models, the so-called “federal model”, is the subject of several legal proceedings. The Finance Court of Rhineland-Palatinate (FG) has decided to suspend enforcement in interim legal protection proceedings. The Federal Finance Court (BFH) has confirmed this decision. The decision in the main proceedings is still pending.
A suspension of enforcement will only be granted if there are serious doubts about the legality of the decision.
The FG and the BFH have doubts under ordinary law and constitutional law about the valuation rules to be applied to determine property values, in particular when the law determines the property value in a typical manner, without the legally regulated possibility of a property owner providing case-by-case evidence that his property value is 40% or more lower than the determined value.
The financial authorities of the affected federal states have responded to these provisional decisions with a joint state decree. This now stipulates that property owners are entitled to provide evidence of a lower value of the property. This will be taken into account if an appointed or certified appraiser or the appraisal committee determines this lower value or if a purchase price that is at least 40% lower is achieved in normal business transactions within one year before or after the main assessment date. The same applies to land subject to building leases.
The decrees are to be applied to all decisions that are not yet final, and also to final value updates if the deviation is greater than €15,000.
Berlin, Brandenburg, Bremen, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate, Saarland (with deviations), Saxony (with deviations), Saxony-Anhalt, Schleswig-Holstein and Thuringia have opted for the federal model for property valuation.
In these federal states, the tax authorities should grant objections with applications for suspension of execution for an appropriate period of time without obtaining an expert opinion from the owner if the information on the value is conclusive. An expert opinion may have to be obtained later. Affected property owners should seek advice in the specific case to determine the chances of success.
Attention: It is important that an objection is raised against the basic notice (the first notice!) within one month of delivery and not against the property tax assessment notice or the notice with which the city/municipality collects the property tax.
September 2024
BFH has concerns about the restriction of loss deductions in forward transactions
Income from capital assets is subject to tax with considerable difficulties in the area of loss offsetting. A double loss offset restriction has been in force since 2021, especially for capital gains from futures transactions.
This means that such losses can only be offset against profits from other futures transactions or option premiums. Offsetting with other capital income is not possible. Loss offsetting is also only possible up to €20,000 per assessment year. Remaining losses can be carried forward to subsequent years for an unlimited period of time.
Tax is automatically deducted from domestic income from futures transactions. Losses are certified to the taxpayer by the bank; offsetting can only be claimed in the tax assessment, as can loss carryforwards.
For example, if you make a profit of €10,000 (before tax deduction) from dividends and a profit of €30,000 (before tax deduction) from a forward transaction, but a loss of €40,000 from another forward transaction, your bottom line is financially zero.
For tax purposes, it is not possible to offset the loss from the forward transaction against the profit from dividends, and the loss of €40,000 against the profit of €30,000 can only be offset to the amount of €20,000. For tax purposes, the taxpayer is therefore left with a profit from capital gains of €20,000 (€10,000 from dividends and €10,000 from forward transactions). Only an amount of €20,000 from the loss on the forward transaction can be taken into account for tax purposes in the relevant assessment year, the remaining €20,000 can only be offset against positive income from forward transactions in the future, with the risk of total loss if no more profits are made.
A married couple subject to tax did not agree with this restriction on the offsetting of losses. After an unsuccessful appeal against the income tax assessment and the rejection of the suspension of enforcement by the responsible tax office, they were given the right in interim legal protection proceedings before both the Rhineland-Palatinate Finance Court and the Federal Finance Court (BFH), and enforcement was temporarily suspended.
The BFH has also already seen constitutional concerns due to a possible violation of the principle of equal treatment if profits not economically achieved are taxed. A similar procedure is still pending to take into account losses on the sale of shares. Since the Federal Constitutional Court will probably be called upon in the end, a final decision will take several years.
Taxpayers should therefore keep open any decisions that are not yet legally binding and seek advice from their tax advisor for this purpose.
September 2024
Corona economic aid: Last deadline for final settlement ends on 30.9.2024
With the Corona economic aid, e.g. bridging, November and December aid, companies and self-employed people were supported from federal funds between June 2020 and June 2022 if they had experienced a significant drop in sales.
In order to help companies quickly during the pandemic and to secure their existence, the funds should be paid out as quickly as possible. The approval and payment of the funds was therefore mostly provisionally based on a forecast. It was planned to subsequently compare the forecast figures with the actual sales development and the fixed costs incurred. This comparison is done by submitting a so-called final statement. Both the application and the final statement are made by a “third-party auditor”, usually the tax advisor.
After the deadline for preparing and submitting the final statement had been postponed several times, it now finally expires on September 30, 2024.
It has happened that applications for Corona economic aid were either submitted via various third-party auditors, for example because the tax advisor changed between several applications, the tax advisor was no longer available in the meantime, or in the case of several companies in an affiliated company, the applications were submitted by different tax advisors for the individual companies.
The final settlement, however, must be carried out or submitted by a single third-party auditor, if necessary by changing. The new third-party auditor must apply for the change on the application platform itself. This is not the responsibility of the company or the self-employed person. However, all the necessary information and data from the documents already submitted must be made available to the tax advisor taking over.
It is also possible to change tax advisors after the final settlement has been made. However, the advisor must be informed of the billing number of the final settlement package or the customer number of the organizational profile. Otherwise, a change is not possible.
Attention: If no final accounts have been submitted on time by September 30, 2024, the responsible approval authorities are required to immediately initiate recovery measures for the full amount of the aid provided to the companies and self-employed persons.
All contributions are compiled to the best of our knowledge. However, no liability or guarantee can be accepted for their content. Due to the partially abbreviated representations and the individual characteristics of each individual case, the explanations cannot and should not replace personal advice.
August 2024
August 2024
Choosing the right tax bracket and its importance
Choosing the right tax class and its actual impact often leads to uncertainty for many taxpayers. The good news first: If you have chosen a tax class that may be disadvantageous, you can correct this in most cases without negative consequences.
Wage tax classes only exist for employees, i.e. for income from employment and unlimited tax liability. In any case, people who have their place of residence or habitual abode in Germany are subject to unlimited tax liability. As a rule, habitual residence in Germany is assumed for more than half of the year. The tax authorities use the tax class to calculate the approximate tax prepayment, taking into account the flat-rate deduction amounts regulated by law. This is then deducted directly at the “source”, i.e. by the employer, by means of wage tax deduction and is shown on the wage or salary slip.
There are six tax classes in total. Unmarried people or people who are permanently separated are classified in tax class I. This also includes divorced and widowed people. The latter are only placed in tax class I from the year after the death of the partner.
Tax class II is intended for single parents with children in the household who are entitled to child benefit. No other people than the parents’ own children may live in the household, i.e. no life partner or the like. Tax class II is more advantageous from a tax perspective than tax class I, as the relief amount for single parents is taken into account directly in the tax deduction.
Tax classes III, IV and V are intended for married or civil partnership employees. If the married couple does not choose a tax class, they both receive tax class IV. The tax deduction is then the same in relation to income and, to put it simply, corresponds to tax class I for unmarried people. This combination should be chosen if the income is roughly the same. If couples with very different incomes choose this tax class combination, the tax office usually withholds too much tax, which is then refunded as part of the income tax assessment. There is also tax class IV “with factor”. Here, the income tax that is expected to be paid jointly is distributed between the spouses in proportion during the wage tax deduction process. This only happens upon request and if the factor is less than 1. Married couples can choose the tax class combination III and V. The tax deduction in tax class III is relatively lower and the tax deduction in tax class V is higher, as the double basic allowance is granted in tax class III, but not in tax class V. If one partner chooses tax class III, the other must necessarily receive tax class V. Choosing this tax class combination only makes sense if either one partner does not work as an employee or if the earnings as an employee are very different. If you choose this tax class combination, you are required to submit an income tax return. Taxpayers with very different earnings should be aware that they may have to pay additional tax when their income tax is assessed. However, there is better liquidity over the course of the year.
Tax class VI is for those who have other employment relationships subject to social insurance contributions or who are at fault for not providing the employer with the wage tax deduction details. The wage tax deduction is very high here because no flat-rate deductions or allowances are included. The compensation is usually made via the income tax assessment.
Since 2020, married couples or civil partners have been able to change their tax class several times a year. This makes sense if there is an impending shift in income and, under certain conditions, can also have a positive effect on the amount of unemployment, sickness or parental benefit. A tax advisor should be consulted here, because a change shortly before these events occurs is usually irrelevant if it is not made in good time.
Attention: When receiving sickness, unemployment or parental benefit, for example, the tax class at the time of receipt or the start of the year is generally decisive. Although these benefits are tax-free, they are subject to the so-called progression reservation and lead to a mandatory assessment. This means that the tax rate on the other taxable income is increased. This particularly applies to people who have income from employment, rental, capital or similar in a calendar year and also receive sickness, unemployment or parental benefits, but also to couples who are assessed jointly and where one of them receives benefits and the other receives taxable income.
August 2024
Allocation of services to the company – timing and documentation of the decision
In a letter dated May 17, 2024, the Federal Ministry of Finance (BMF) issued a statement on the allocation of items to business or private assets in the context of input tax deduction as a result of several decisions of the Federal Finance Court (BFH ) from 2022 and a decision of the European Court of Justice (ECJ) from 2021, as well as on the questions of the timeliness of corresponding notifications to the tax authorities and their documentation.
The ECJ had ruled that the tax authorities may refuse input tax deduction in relation to an item if the taxpayer has the right to choose whether it should be allocated to the business sector or to private assets, but the taxpayer has not declared to the tax authorities by the deadline for submitting the sales tax return which allocation he has made or at least corresponding indications are available to the tax authorities.
The Federal Fiscal Court had also decided that if objectively recognizable evidence is presented within the documentation period, no time-bound notification to the tax authorities is required and that this can also be done after the deadline has expired. A notification is therefore only required if there are no objectively recognizable signs.
The documentation must be submitted within the statutory standard deadline for submitting the sales tax return if there are no objectively recognizable signs of evidence. An extension of the deadline for submitting the tax return does not extend the documentation period. A decision made in the advance declaration procedure can be corrected by express notification until the documentation period has expired.
The Federal Finance Court has therefore now clarified that, in the case of an allocation option, contracts with VAT identification or designation in building permit documents, e.g. as an office wing, are also to be assessed as corresponding signs of evidence, even if they are only partially allocated to the company. The same applies to the company insurance of an object, purchase or sale under the company name, accounting and income tax treatment of the object. Nevertheless, for reasons of legal certainty, the tax office should also be notified in good time.
The principles of the BMF letter of May 17, 2024 are to be applied in open cases. The BMF letter can be downloaded from its homepage. The previously valid BMF letter of January 2, 2014 was repeated with the new letter, and the VAT implementation decree was also adjusted accordingly.
August 2024
Special leasing payment as a business expense
The Federal Finance Court (BFH) had to deal with the question of how leasing payments, in particular special leasing payments, are to be divided up when a vehicle is used both privately and professionally. Specifically, the question was whether special leasing payments, through which the current leasing rates can or could be reduced, should be divided up pro rata temporis over the months or should be taken into account in full in the year of payment in an income surplus calculation.
In its ruling of March 12, 2024, the BFH decided that special leasing payments for a vehicle used pro rata for business purposes should be divided up over the respective months of use, regardless of the time of payment, provided that the current leasing rates could be reduced as a result, which was the case here.
First of all, the total annual expenses including all fixed costs and depreciation must be determined, here including the pro rata special leasing payment spread over the total period of use, and then these must be divided into a business and private portion.
In the case of a car, the basis for allocation is the determination of the number of kilometers driven for business and private purposes in relation to the total distance. If this results in a business use share of less than 10%, the vehicle must be classified as private assets. According to the ruling of the Federal Fiscal Court, this is not based on the initially intended use, but on the actual use over the entire leasing period. In such a case, the costs for the vehicle cannot be claimed as business expenses, but only by way of a usage contribution. However, it should be noted that in the present case, the Federal Fiscal Court did not decide whether the special leasing payment could have been fully included in the rental and leasing income as advance business expenses on the basis of intended future use. Advice from a tax advisor should be sought on this matter.
August 2024
Extension of the tariff reduction for income from agriculture and forestry
The legislature had passed a tariff reduction for income from agriculture and forestry for a limited period until the 2022 assessment period. The extension of the tariff reduction, which is to apply retroactively from the 2023 assessment period for a limited period until the 2028 assessment period, was decided by the Bundestag on July 5, 2024. The Bundesrat still has to approve it, which was not the case at the time of going to press.
The tariff reduction is to take place in such a way that profits and losses from a 3-year period can be offset against each other, namely the assessment periods 2023 to 2025 against each other and the assessment periods 2026 to 2028. The regulation is to apply directly to farmers within the meaning of the EU regulation, and to other income from agriculture and forestry after approval by the European Commission. Income from forestry, inland fishing, pond farming and fish farming for inland fishing and pond farming are subject to approval.
The background to the regulation is the mitigation of profit fluctuations as a result of climate change or weather conditions. The Bundestag and the Bundesrat still have to approve the extension of the tariff reduction. At the time of going to press, this had not yet happened.
So far, a ruling by the Lower Saxony Finance Court of April 24, 2024 (4 K 6/24), which, in another lawsuit, found concerns about the constitutionality of the tariff reduction for agriculture and forestry and saw a violation of the principle of equal treatment, has gone relatively unnoticed. The appeal was allowed. This will be reported on here in the future.
August 2024
Is the energy price flat rate taxable? Appeal filed with the Federal Fiscal Court
With the Tax Relief Act 2022, the legislature introduced an energy price flat rate (EPP), which eligible persons received in the amount of €300. The law regulates the taxability of the benefit received. Depending on personal tax circumstances, a tax liability may arise. By law, the EPP is assigned to income from employment or, alternatively, to other income.
A large number of taxpayers are currently taking legal action against the taxation of the EPP. In one of the leading cases, the Münster Finance Court (FG) ruled on April 17, 2024 that an employee’s EPP is taxable and subject to tax on income from employment and that this is also constitutional. The court did not have to decide whether this also applies to beneficiaries who are not employees and who may be taxed as part of other income.
Because of the fundamental importance, the FG has allowed the appeal, which has been filed with the Federal Finance Court (BFH). A decision is not yet foreseeable. In comparable circumstances and with decisions that are not yet legally binding, taxpayers can file an appeal and request suspension of enforcement by referring to the BFH file number VI R 15/24. The tax advisor is the appropriate contact person to clarify the matter. Any tax savings are, however, minimal.
All contributions are compiled to the best of our knowledge. However, no liability or guarantee can be accepted for their content. Due to the partially abbreviated representations and the individual characteristics of each individual case, the explanations cannot and should not replace personal advice.
Juli 2024
Juli 2024
Tax classes III and V are to be abolished – spousal splitting is to remain
The federal government is planning to abolish tax classes III and V. The timing is uncertain. The change is to go hand in hand with an increasing degree of digitization and an agreement with the states has yet to be reached.
Married couples and registered civil partnerships currently automatically receive the tax class combination IV / IV, but can also receive the combination III / V or tax class IV with a “factor” upon request. The tax class combination IV / IV is usually chosen by couples whose incomes do not differ significantly or if wage replacement benefits such as parental allowance etc. are due. The basic allowance and the child allowances are not taken into account in tax class V, but are taken into account twice in tax class III. For employees whose income is subject to automatic wage tax deduction, this leads to a higher tax deduction in tax class V and a lower tax deduction in tax class III.
In summary, these couples have more liquidity available during the year. However, they are obliged to submit an income tax return in the following year. This can lead to a tax surcharge if there are no other major deductions.
The tax class combination III / V is to be replaced by a so-called factor method, in which the tax burden is to be determined realistically during the year, taking into account the respective earned income.
The so-called spousal splitting is also to be taken into account and not abolished, regardless of the tax class combination. With spousal splitting, the incomes of the partners are added together and the allowances to which they are entitled are taken into account twice. This prevents an allowance from being ignored if one partner has a low income. This reduces the tax rate for the partner with the higher income.
The next issue will look at aspects of choosing the right tax class.
Juli 2024
Second home tax for dual household management is only a limited deductible expense
Anyone who maintains a second home at their place of employment for professional reasons can claim the necessary additional expenses due to the dual household management required for professional reasons as business expenses in their income tax return. This includes accommodation costs, but not more than €1,000 per month or €12,000 per year, and other necessary additional expenses. The latter are fully deductible without restriction. These include, for example, furnishings and equipment. For the sake of simplicity, an amount of up to €5,000 is assumed to be necessary additional expenses. If a furnished apartment is rented, care should be taken to show the rent share for the furniture separately in the rental agreement. Otherwise, a division can be made by estimate.
In an appeal procedure (case number VI R 30/21), the Federal Finance Court (BFH) had to decide whether the second home tax levied by a city was one of the accommodation costs that are subject to limited deduction or one of the necessary additional expenses that are subject to unlimited deduction. The Munich Finance Court (FG) had ruled in the first instance that the second home tax was one of the additional expenses that are subject to unlimited deduction. In the opinion of the tax authorities, the second home tax should be included in the accommodation costs that are subject to limited deduction.
This distinction is particularly relevant for taxpayers because living space in large cities and metropolitan areas, including ancillary costs, costs slightly more than €1,000 per month and all accommodation costs above this amount are not taken into account for tax purposes.
However, in its judgment of December 13, 2023, the BFH ruled that the second home tax paid by the taxpayer is to be included in the accommodation costs that are subject to limited deduction. In its justification, the Federal Fiscal Court stated that the collection of the second home tax is directly linked to the use of the home, is based on the annual rental expenditure and therefore represents an actual expenditure for the use of the accommodation.
Juli 2024
No loss allowance in the year of the merger for the acquirer through offsetting
In its ruling of March 14, 2024 (case no. IV R 6/21), the Federal Finance Court (BFH) ruled that when a partnership merges with another partnership – this means the tax-neutral merger of two companies – the profit generated up to the transfer date in the year of the merger cannot be offset against the loss suffered by the transferring partnership up to that point. This applies in any case if the parties have chosen the end of December 31 of a year as the transfer date in their internal relationship.
Naturally, the companies involved choose a tax transfer date on which the tax liability of the transferring company ends and is transferred to the acquiring company. However, under commercial law, the existence of the transferring company only ends on the day the merger is entered in the commercial register, i.e. a day that cannot be freely chosen after the agreed transfer date.
According to the Federal Fiscal Court’s ruling, the tax bases, profit or loss, continue to be attributed to the transferring company and implemented in the corresponding notices.
Juli 2024
The grant recipient register is online
The Federal Central Tax Office (BZSt) is responsible for the newly created donation recipient register. This is a nationwide central register that includes all organizations that are authorized to issue so-called donation receipts. The data will be gradually transmitted to the BZSt by the responsible tax offices from 2024. Foreign organizations from EU or EEA countries can also be included in the register upon request. The prerequisite for inclusion is that the corporations meet the German criteria for being allowed to issue donation receipts. These are those that are recognized as non-profit organizations under the tax code.
Until now, there was no way for taxpayers to find out in advance whether intended or made donations would ultimately be eligible for the tax deduction as special expenses. For example, non-profit organizations often tried to obtain a privately organized donation seal of approval.
However, this meant that potential donors had only limited visibility as to whether the non-profit status still existed at the current time.
Using the donation recipient register, which can be accessed on the BZSt website, people willing to donate can now use various search parameters to search for non-profit organizations that meet the requirements for special tax deductions under German law. It is also possible to search by location, field of activity, etc. At a later date, it will also be possible to store bank details there.
Legally binding decisions, e.g. on the withdrawal of non-profit status and thus the end of the right to issue donation receipts, are entered in the register.
The bodies registered in the register transmit donations received online so that paper receipts no longer have to be issued. They can be used by taxpayers when filing an online tax return or are automatically stored there at a later date. Anyone who is not yet registered can still issue donation receipts in paper form.
Juli 2024
Flat-rate income tax also applies to company events in “small groups”
By judgment of March 27, 2024 (ref. VI R 5/22), the Federal Finance Court (BFH) ruled that since the change in the law from the 2015 assessment period, an employer can also assume the taxation of the benefit in kind through the flat-rate wage tax of 25% for company events that are not open to all members of a company or part of a company.
Many companies organize summer festivals or Christmas parties for their employees, for example. The company can make the costs incurred for this available as a tax-free benefit in kind up to an amount of €110 per event up to twice a year per employee. The employee then does not have to tax the benefit as wages and no social security contributions are payable.
If an employee enjoys more than two events per year or the costs for him and possibly an accompanying person exceed €110 per event, the excess amount is wages subject to income tax, for which social security contributions must also be paid.
However, the employer can exempt the employee from income tax and social security obligations by paying a flat-rate income tax of 25%. The tax advisor should be consulted on the procedure for so-called temporary workers.
In the case to be decided, the tax office was of the opinion that the employer was not entitled to flat-rate taxation because there was no company event, as the event was not accessible to all employees, but only to a select group of senior managers and board members.
In the past, according to the case law of the Federal Fiscal Court, the opportunity for all employees of a company or part of a company to participate was a prerequisite for recognition as a company event. After the legislature amended the law accordingly, but despite the established case law of the Federal Fiscal Court on this point did not explicitly include this requirement in the law, the court now assumes that since the change in the law in 2015, a company event can also exist if it is not accessible to all employees.
Juli 2024
No loss allowance in the year of the merger for the acquirer through offsetting
By judgment of March 14, 2024 (case no. IV R 6/21), the Federal Finance Court (BFH) ruled that when a partnership merges with another partnership – this means the tax-neutral merger of two companies – the profit generated up to the transfer date in the year of the merger cannot be offset against the loss suffered by the transferring partnership up to that point. This applies in any case if the parties have chosen the end of December 31 of a year as the transfer date in their internal relationship.
Naturally, the companies involved choose a tax transfer date on which the tax liability of the transferring company ends and is transferred to the acquiring company. However, under commercial law, the existence of the transferring company only ends on the day the merger is entered in the commercial register, i.e. a day that cannot be freely chosen after the agreed transfer date.
According to the Federal Fiscal Court’s ruling, the tax bases, profit or loss, continue to be attributed to the transferring company and implemented in the corresponding notices.
Juli 2024
VAT liability for online event services and online services
Due to advancing digitalization, the Federal Ministry of Finance (BMF) issued a letter dated April 29, 2024 on the VAT definition, classification and delimitation of online event services and online services to end consumers (B2C).
In particular, the question is whether and under what conditions digital offers benefit from a VAT exemption or reduction if they are also VAT-free or reduced when provided in analog form. This particularly affects services in the education and health sectors, but also the arts and culture sector.
The tax authorities make a key distinction between whether these are so-called live streaming offers with or without interactive offers, whether they are made available for download, whether they are recordings and how automated the service or the human involvement in the provision of the service is during the period of digital use.
When it comes to combination offers and the assessment of whether it is a single service, it depends on whether the services can be purchased separately and whether, for example, a surcharge has to be paid. Companies that are active in the areas mentioned or would like to be active in them should seek advice from their tax advisor before implementing them. Otherwise, there could be an expensive “surprise” if the supposedly VAT-free service is, contrary to expectations, subject to VAT.
Juli 2024
Delayed lump sum taxation can be expensive
The Federal Social Court (BSG) ruled on April 23, 2024 (case number B 12 BA 3/22 R) that the flat-rate taxation of 25% for expenses for company celebrations above €110 must be carried out immediately with the next pay slip.
A later registration of the flat-rate taxation means that employer and employee contributions for all branches of social insurance must be paid retroactively under social security law. According to the BSG, any other regulation under tax law is irrelevant.
All contributions are compiled to the best of our knowledge. However, no liability or guarantee can be accepted for their content. Due to the partially abbreviated representations and the individual characteristics of each individual case, the explanations cannot and should not replace personal advice.
Juni 2024
Juni 2024
The Fourth Bureaucracy Reduction Act is to come – the key points
On March 13, 2024, the Federal Cabinet approved the government draft for a Fourth Bureaucracy Reduction Act. The date of adoption in the Bundestag and the approval of the Bundesrat are still open.
A number of measures are being planned, the focus of which can be assigned to the following areas, two of which will be discussed here as examples:
• Shortening the retention periods for accounting documents in commercial and tax law
• Various measures to promote digital change
Changes with a tax reference are to be made – without claiming to be complete – as follows:
The currently applicable retention period for accounting documents of 10 years is to be shortened to 8 years. The VAT period for keeping invoices will also be adjusted to 8 years. It is expected that the regulations will come into force the day after the law is announced, whereby the shortening will only apply to new cases, analogous to the Growth Opportunities Act, and not to existing retention periods.
Attention: In many individual cases, longer retention periods may still apply, e.g. in the case of a provisional tax assessment, an external audit that has begun or tax criminal and fine investigations of which the person concerned is aware. Nothing will change in this regard as things stand. The destruction of accounting documents and other documents in commercial transactions should only take place after consultation with the tax advisor.
The digital change is to be taken into account by ensuring that where the written form requirement has previously applied (handwritten signature), text form (email, etc.) will suffice in the future. There are to be changes to this in commercial tenancy law, association law, commercial and corporate law and in the professional law of legal and tax advisory professions. This list is not exhaustive.
For companies with a VAT liability of more than €9,000 per year (previously €7,500 per year), the advance declaration period for the VAT return is to change from quarterly to monthly and will apply from the quarter following the announcement.
For resellers who apply differential taxation (taxation of the difference between the purchase price and the sales price), an increase in the de minimis limit to €750 is planned (previously €500).
Juni 2024
Changes to parental allowance from 1 April 2024
The legislature has made some changes to the receipt of parental allowance for births from April 1, 2024. For births up to March 31, 2024 and ongoing parental allowance periods, the previous regulations remain in place.
What has changed? The upper limit for the taxable annual income above which there is no longer any entitlement to parental allowance has been adjusted. Since April 1, 2024, the limit has been €200,000, and from April 1, 2025, it will be reduced again to €175,000. For births from September 1, 2021 to March 31, 2024, the income limit was €300,000 for couples and €250,000 for single parents. This distinction between couples and single parents will also no longer apply in the future.
The taxable income that is decisive for parental allowance is not the same as the gross salary or company profit, because the taxable annual income was previously reduced by limited or unlimited deductions such as advertising costs, pension contributions and other special expenses as well as any extraordinary expenses.
The parallel receipt of basic parental allowance for both parents is now reduced to just one month. Previously it was two months. If a longer joint parental leave is nevertheless chosen, the second parent will no longer receive parental allowance. In addition, the parallel parental leave must be taken within the first twelve months of the child’s life.
Exceptions can be made upon request in the case of multiple births, newborns with disabilities or existing children with impairments. In these cases, parental leave can still be taken in parallel as required.
The basic parental allowance is between €300 and €1,800 per month. The duration of receipt depends on the parental allowance variant chosen. In addition to the basic parental allowance, there is also the Parental Allowance Plus and the Partnership Bonus, which can be paid for between 12 and a maximum of 28 months.
Juni 2024
Abolition of the “fifth rule” – what this means for employers and employees
As part of the so-called Growth Opportunities Act, the abolition of the so-called “fifths rule” was also decided as a measure to reduce bureaucracy for companies.
Previously, special wages, for example those that were settled in one amount for several years or severance payments to be paid, were already eligible for a tariff reduction as part of the wage tax deduction procedure. The employee was therefore paid more net than he would actually be entitled to for the month of the settlement according to his wage tax deduction characteristics. In such a case, however, the employee was obliged to submit an income tax return for the year. Such amounts were shown separately in the wage tax certificate and this will remain the case in the future.
Employers will no longer be required to implement this tariff reduction in the wage tax deduction procedure from the 2025 assessment year. This means that employees in the aforementioned constellations will have a higher tax deduction in the future. However, you can get back any overpaid wage tax from the tax office as part of the income tax assessment by submitting an income tax return.
Attention: Employees will have to take action on their own initiative in the future. Otherwise, a lot of money that the employee is entitled to can remain with the tax office. Employers should point this out to their employees. In the future, not only legal but also tax advice should be sought before agreeing on severance payments.
Juni 2024
Introduction of the economic identification number in 2024 for economically active persons
As early as 2003, it was decided that a special tax number should be assigned to make it easier to distinguish between private and business spheres in tax matters. From 2008, the tax identification number (tax ID) was introduced for all German citizens. It is assigned to children after birth and is valid for life. The tax ID is linked to the different tax numbers for the various types of taxes, e.g. income tax, sales tax, etc. at the tax authorities. The tax number changes, for example, if you move to the area of responsibility of another tax office, but the tax ID does not. In the long term, the tax ID is to replace the tax number.
In autumn 2024, the Federal Central Tax Office (BZSt) will also issue the economic identification number (W-IdNr.) for commercial transactions. This is applied for by the responsible tax authority at the BZSt for economically active persons.
A W-IdNr. will be given to associations of persons and legal entities, e.g. GmbH, cooperatives and stock corporations, and to natural persons who are economically active, e.g. freelancers or commercial workers. Furthermore, every employer will receive a W-ID number, including private households with a domestic helper registered with the mini-job center.
However, the legal regulation stipulates that if a person has several different economic activities, the last five digits of the W-ID number will vary. For example, if a retail salesperson runs a shop, rents out several holiday homes and employs a domestic helper in the private sector, he will receive three W-ID numbers that differ within the last five digits. The W-ID number will be based on the sales tax identification number (VAT ID) already known to the company. The W-ID number is intended to replace the VAT ID.
If a law requires the W-ID number to be given, the taxpayer can only carry out these transactions from the point in time at which he already has the W-IdNo.
Juni 2024
On the requirements for a proper electronic logbook
The free or discounted provision of a car by an employer to employed managers or employees, even for private purposes, results in a so-called monetary benefit for the user. The beneficiary saves expenses that he would otherwise have had to pay for the purchase and maintenance of a vehicle. The employee’s salary or wage is therefore fictitiously increased by the benefit of use, with the result that higher income tax and possibly higher social security contributions, church tax and solidarity surcharge must be paid by the employee.
The monetary benefit is often calculated using the so-called simplification rule. The assessment basis depends on the gross list price and on whether an electric vehicle or one with a combustion engine is provided.
If the simplification rule is used, no records of the individual journeys with the vehicle need to be kept; with high gross list prices or little private vehicle use, this can be very costly.
Alternatively, a logbook can be kept in which all journeys must be documented, which can be economically worthwhile. If the company and employee decide to record the data, the costs for the vehicle are divided according to the number of kilometers traveled for business and private purposes, and the employee is allocated the costs of the private journeys, including a surcharge for the journeys between home and work, as a monetary benefit. The risk of an improperly kept logbook lies with the company or the employee using it.
Electronic logbooks are increasingly being kept. In its ruling of November 24, 2023 (3 K 1887/22 H(L)), the Düsseldorf Finance Court once again ruled that entries may not be made days or weeks after the journeys, not even on notes that are then later transferred to a manual or electronic logbook.
Juni 2024
Groundbreaking court decision for partnerships with identical shareholdings
In its ruling of November 28, 2023 (2 BvL 8/13), the Federal Constitutional Court declared a regulation unconstitutional, according to which a transfer of assets at the tax book value between sister partnerships with absolutely identical shareholdings is not regulated by law.
The current legal regulation has been controversial among experts and courts for over 20 years. The courts have ruled differently in the past. The legislature is now called upon to create a constitutional regulation retroactively and without a transition period. However, it can be assumed that a new regulation will take some time.
It remains to be seen with what content the legislature will implement the order of the highest German court, i.e. whether the transfer of assets at book value will be possible in the future and what a regulation will look like in the case of only partial personal identity.
Note: In the meantime, taxpayers should always consult their tax advisor in the event of such circumstances.
Juni 2024
Travel cancellation insurance – from harmless injury to the development of a serious illness
Travel cancellation insurance policies for the event of illness generally only cover illnesses that were not already known or expected when the contract was concluded.
The Schleswig-Holstein Higher Regional Court (OLG) had to decide on the following facts regarding the obligation to pay benefits in the event of a trip cancellation: In November 2019, a husband had booked a trip to Cuba for himself, his wife and his son for February 2020. Just a few days later, the wife fell and suffered a graze on her ankle, among other things. The man then ordered an “annual travel card” for his family, which also included travel cancellation insurance. This included insurance cover for death, serious accidents and unexpectedly serious illness. In the event of an unexpected deterioration of an existing illness, the clauses excluded insurance cover if treatment for the illness had been carried out in the last six months before the contract was concluded. In January 2020, the woman had to undergo an inpatient skin transplant after the wound on her ankle became infected in December 2019 and an ulcer developed as a result. The man then canceled the trip and claimed the cancellation costs from the insurance company. The insurance company refused to cover the cancellation costs.
The judges of the Higher Regional Court ruled in favor of the couple. The wife had no knowledge of the existence of an illness when the contract was concluded. An ulcer, i.e. a defect in the substance of the skin – triggered by an infection – is objectively a completely different clinical picture than a “mere” abrasion caused by a fall. The fact that the ulcer would not have developed without this wound does not change the fact that the wound had to become infected in order to develop. At the time the contract was concluded, there were no signs of such an infection.
Juni 2024
Home contents insurance – Interpretation of an insurance clause on alternative accommodation costs
In a case decided by the Higher Regional Court of Saarbrücken (OLG), a tenant had taken out a so-called “carefree household contents insurance” with an insurance company. According to the insurance terms and conditions, the costs for a hotel or similar accommodation without additional costs (e.g. breakfast, telephone) required as a result of an insured event are covered if the otherwise permanently occupied apartment becomes uninhabitable and the policyholder cannot reasonably be expected to limit the accommodation to a habitable part.
The OLG judges came to the decision that the insurance terms and conditions cannot be interpreted in such a way that they also cover costs incurred by renting alternative accommodation after an insured event (in this case: water damage), regardless of whether these costs were really necessary. If alternative accommodation is used even though the apartment is still habitable after the insured event or the limitation to the habitable part is reasonable, no costs are usually reimbursed.
Juni 2024
Workshop risk also applies to the costs of an expert
In January 2024, the Federal Court of Justice (BGH) clarified that the workshop risk does not only apply to invoice items that are excessive through no fault of the injured party, for example due to improper or uneconomical use of materials or working hours. Items on the invoice that relate to individual repair steps and measures that were not actually carried out – which are not recognizable to the injured party – can also be reimbursed.
The BGH judges have now decided that these principles on workshop risk can also be applied to excessive cost estimates by an expert whom the injured party has commissioned to assess his vehicle to determine the damage caused by the accident. This is because the injured party’s ability to gain knowledge and influence the situation is limited not only with regard to the repair shop, but also with regard to the motor vehicle expert, especially once he has commissioned the assessment and placed the vehicle in the hands of the expert.
Juni 2024
Requirements for billing work on an hourly basis
If the customer undertakes to pay for the contractor’s contractual services based on the work involved at agreed hourly rates, the remuneration is calculated from the product of the respective hourly rate and the number of hours worked. To justify his claim to remuneration in the process, the contractor must therefore initially only explain and, if necessary, prove how many hours were spent on providing the contractual services and at which hourly rates.
The conclusive billing of an hourly wage contract does not generally require any differentiation in the sense that the billed working hours are allocated to individual activities. Such an allocation may make sense. It is not necessary for the verifiable presentation of the time spent that is subject to remuneration.
The customer must therefore only be able to understand which specific services the contractor has provided. As a rule, it is sufficient if the scope of services that are subject to an hourly wage is clear from the contract itself or in another way after the service has been provided.
Juni 2024
Reimbursement of training costs
In a case heard before the Federal Labor Court, a woman worked as an accountant in a tax office from April 1, 2014 to June 30, 2020. At the end of 2017, she and her employer concluded a training contract with the following content, among others: From August 1, 2017 to March 31, 2019, the employee will take part in training measures (course to prepare for the 2018/2019 tax advisor exam) that will prepare her for the tax advisor professional exam. The funding should total up to €10,000. The funding budget used should be repaid, among other things, if the employee repeatedly fails to take the exam. She did not take the exam in 2018, 2019 or 2020 and terminated the employment relationship with effect from June 30, 2020 by letter dated May 14, 2020. The employer demanded repayment of the training costs incurred.
Individual contractual agreements according to which an employee must contribute to the costs of training financed by the employer if he does not complete the training are generally permissible. They do not generally disadvantage the employee disproportionately. However, it is not permissible to link the repayment obligation to repeated failure to take the desired examination without considering the reasons for this. In any case, practically relevant case constellations in which the reasons for not taking the examination are not the responsibility of the employee must be exempted from the repayment obligation.
The repayment obligation should arise regardless of the reasons for the employee’s termination of employment. The agreement thus also provided for repayment in cases in which the employee repeatedly fails to take the exam because the continuation of the employment relationship is no longer reasonable due to misconduct on the part of the employer and he therefore terminates it. It is inappropriate to impose a repayment obligation on the employee in this case too.
The BAG judges decided that the employer was not entitled to repayment of the training costs incurred. This disproportionately disadvantaged the employee, contrary to the principles of good faith, and was therefore ineffective.
Juni 2024
Better treatment of temporary workers compared to own employees
An employee does not automatically become a temporary worker just because his or her direct superiors and most of the employees in the company are not employed directly by the employer, but are employed as temporary workers by another company (which belongs to the group).
The principle of equal treatment in the Temporary Employment Act protects temporary workers from being treated worse than comparable permanent employees. However, it does not provide protection for permanent employees. This is because it does not give rise to any entitlement to the higher pay of a better-paid temporary worker.
Juni 2024
Social insurance obligation – contract with a one-person corporation
The Federal Social Court (BSG) had three cases in which the natural persons were the sole shareholders and managing directors of corporations (entrepreneurial company <UG> and limited liability company <GmbH>). Third parties concluded contracts with these corporations for the provision of services. Two cases concerned nursing services in the inpatient area of a hospital, the third case concerned advisory work. In fact, the work was carried out exclusively by the natural persons. In all cases, the German Federal Pension Insurance found that insurance was compulsory due to employment.
In all three cases, the BSG made it clear that a natural person can be employed and subject to social insurance contributions, even if the contracts are exclusively between the client and a corporation in which this person is the sole managing director and shareholder. The decisive factor is whether the activity of this person is classified as dependent employment overall. The existence of such an employment relationship therefore does not depend solely on the contractual arrangement, but on how the work is actually carried out.
Juni 2024
Landlord’s right to inspect the property in the event of a rent increase
The tenant has a contractual obligation to grant the landlord access to his apartment – after appropriate advance notice – if there is a specific objective reason for this. When examining whether such a reason exists, the landlord’s property rights must be taken into account on the one hand, and the tenant’s right to be “left alone” in the rented premises and his protected right to possession of the rented apartment on the other.
The landlord’s interest in having the rented apartment inspected by a publicly appointed and sworn expert commissioned to prepare a report for the purpose of preparing a comparative rent increase represents an objective reason, because the impairments associated with this inspection are only minor. The fact that the landlord is not necessarily dependent on the expert commissioned to prepare a rent increase report having inspected the rented premises beforehand in order to meet the formal requirements of a rent increase request does not change this.
The criteria for the local comparative rent include, among other things, the condition of an apartment and thus also its state of repair, which can generally only be determined by inspecting the interior of the living space.
Juni 2024
No immediate termination in case of a broken tenancy
Each contracting party can terminate the tenancy agreement for good cause without notice. Good cause exists if the person terminating the contract cannot be expected to continue the tenancy until the end of the notice period or until the tenancy is otherwise terminated, taking into account all the circumstances of the individual case, in particular any fault of the contracting parties, and weighing up the interests of both parties.
Good cause also exists if one contracting party permanently disturbs the peace of the house. A permanent disturbance of the peace of the house occurs if one of the tenants seriously violates the duty to show mutual consideration when using the rented property. This means that they must behave in such a way that other tenants and, if applicable, the landlord living in the house are disturbed beyond the unavoidable extent.
The judges of the Federal Court of Justice decided that in residential tenancy law, a disruption of the relationship of trust between tenant and landlord alone is generally not sufficient to give one of the two parties the right to terminate the tenancy agreement for good cause without notice. Termination without notice normally requires that the basis of trust on which the contract is based is not only disrupted, but that this disruption was caused by misconduct or breach of duty on the part of the other contracting party.
All contributions are compiled to the best of our knowledge. However, no liability or guarantee can be accepted for their content. Due to the partially abbreviated representations and the individual characteristics of each individual case, the explanations cannot and should not replace personal advice.
May 2024
May 2024
E-invoicing for companies from 1.1.2025
In Germany, the issuing of electronic invoices in business transactions between companies (B2B) will be mandatory in the future. This change is part of the so-called Growth Opportunities Act, which cleared the last parliamentary hurdle on March 22, 2024.
This affects deliveries and services between companies if both are based in Germany. Residence is defined by the registered office, management or permanent establishment in Germany. If a foreign company has a permanent establishment in Germany, part of the sales in Germany must be realized from the permanent establishment. If you are unsure, it is advisable to seek tax advice.
An e-invoice is an invoice issued, transmitted and received in a special format that enables automatic processing. The format must comply with an EU standard. Exceptions for certain formats can be made provided the required information is available in machine-readable form. The permitted formats include, for example, XRechnung as a purely machine-readable format and ZUGFeRD as a hybrid format, which is a combination of machine-readable data and a PDF invoice that is readable by the human eye. The EDI procedure, which is already used by some companies, remains permissible, but may require adjustments in the future.
Attention: From January 1, 2025, a pure PDF invoice will no longer be an electronic invoice, but an “other invoice”.
All companies without exception must be able to receive electronic invoices from January 1, 2025. According to current knowledge, this also affects landlords, doctors and PV system operators, for example. Not all individual questions have yet been clarified, and there may be a further delay. Clarification from the Federal Ministry of Finance (BMF) is still expected.
The sending of e-invoices is also generally mandatory for all companies. There are transitional regulations here, which are as follows:
Companies with a previous year’s turnover of > €800,000 in the B2B sector must send e-invoices from January 1, 2027. Until December 31, 2026, these may still be “other invoices”, e.g. paper invoices, PDF invoices.
Companies with a previous year’s turnover of < €800,000 in the B2B sector may still send “other invoices” until December 31, 2027.
From January 1, 2028, all companies in the B2B sector must also be able to send e-invoices.
Anyone who does not yet use an e-invoice between January 1, 2025 and December 31, 2027, but sends another digital format, such as the invoice in PDF format, needs the consent of the recipient.
In the B2B sector, there is no obligation to issue e-invoices for non-taxable or tax-free deliveries and services, small-value invoices under €250 and travel tickets. There are currently no plans to issue e-invoices for private customers (B2C).
Anyone who fails to comply with their obligation to participate in e-invoicing as required or does so too late may risk tax disadvantages and fines of up to €5,000.
May 2024
Growth Opportunities Act – a brief overview
The so-called Growth Opportunities Act (WCG) came into force on March 28, 2024. Most of the changes apply retroactively from 2023 or January 1, 2024, but some only apply from January 1, 2025 or later. Some tax relief is temporary. The measures adopted primarily affect companies and investors, but also employees and pensioners.
Measures that have been canceled and increases that are smaller than initially planned have already been reported. Nothing has changed in this regard. The statements therefore remain current. In addition to the introduction of e-invoicing for companies in the B2B sector, here is a brief overview of other important changes:
From January 1, 2024, companies can deduct gifts for business partners up to €50 as a business expense that reduces profits.
The eligible gross list price for electric company cars has been increased to €70,000.
The already expired limitation of the declining-balance depreciation on movable assets of the fixed assets has been reintroduced for purchases between April 1, 2024 and December 31, 2024, but a maximum of twice the value of the linear depreciation or 20%.
Small businesses generally do not need to submit a sales tax return from 2024.
The threshold for the obligation to submit a sales tax advance return will be increased to €2,000 from 2025.
The option of taxing based on received remuneration will be increased to €800,000 from 2024.
The thresholds for the obligation to keep accounts will also be raised to €800,000 in sales or €80,000 in profit for commercial enterprises and agriculture and forestry for financial years after December 31, 2023.
There are also changes to the Corporate Tax and Conversion Tax Act.
The exemption limit for private sales transactions will increase to €1,000 from 2024 and the flat rate for professional drivers to €9/day. Pension taxation will be reduced by 0.5% for new pensioners and the age relief amount will be adjusted accordingly. Investment costs are now also eligible for research and development projects.
One of the upcoming publications will be devoted to the changes in the area of inheritance tax for limited taxpayers, as well as the digital grant recipient register.
May 2024
Lump sums for withdrawals of goods in 2024
In a letter dated February 12, 2024, the Federal Ministry of Finance (BMF) announced the flat-rate amounts applicable for the calendar year 2024 for withdrawals of goods (free transfers of value) for food and beverages. These are annual amounts. If booked monthly, the amounts are to be divided into twelfths.
The legislator assumes that people who sell food and beverages commercially also consume them privately. In the case of private consumption or use, individual records of the values withdrawn must be recorded in the accounts. This effort is usually only worthwhile if personal consumption is low.
For reasons of simplification, the legislator has therefore introduced flat-rate amounts for withdrawals of goods, which differ depending on the branch of business. Anyone who runs a restaurant, regardless of type, a café, a bakery, a confectionery shop, a butcher’s shop, a retailer of food or drinks, a fruit or vegetable retailer, or a dairy or egg retailer can find the applicable withdrawal values in the BMF list (www.bundesfinanzministerium.de – Topics – Taxes – Tax administration & tax law – Audit – Standard rate collection / flat rates). Individual recording is not necessary when using the flat rate.
The bakery owner is also not classified as a food retailer if he also has a refrigerator in the sales room from which he sells milk, cheese and eggs, for example, and the income from this is of secondary importance. Only one flat rate is to be applied, and that is the higher of the two.
Withdrawals that are not food or drinks, e.g. tobacco, magazines, clothing or electrical goods, must always be recorded individually and entered in the accounting system.
May 2024
Incorrect VAT declaration on invoices to end consumers does not cause harm
The Federal Ministry of Finance (BMF) clarified in a letter dated February 27, 2024 that an incorrect, higher VAT statement by an entrepreneur on invoices to end consumers no longer means that the entrepreneur has to pay the higher VAT to the tax office.
However, for invoices with increased, incorrect VAT statements from companies to companies that are not corrected, the higher VAT remains to be paid to the tax office.
The clarification in the private customer sector is based on the fact that the legal regulation in the VAT Act is different. In a ruling dated December 13, 2018, the Federal Finance Court (BFH) ruled that an incorrect, higher VAT statement on invoices means that the higher VAT must be paid to the tax office, regardless of whether the invoice recipient is a private customer or a company.
In contrast to the BFH, the European Court of Justice (ECJ) ruled in its judgment of December 8, 2022 that if an entrepreneur incorrectly declares the VAT to private customers, he does not owe the incorrect higher tax, but only the lower VAT if it had been declared correctly. However, this requires that the private customer cannot deduct input tax. But this decision is unlikely to have brought about any peace. In another lawsuit, the Cologne Finance Court ruled in its judgment (8 K 2452/21) of July 25, 2023 that even an incorrect VAT declaration to authorities and administrative institutions is harmless for the invoice issuer, since the public sector is also not entitled to deduct input tax. However, this only applies if the invoice issuer assumed when preparing the invoice that he had done everything correctly by declaring the VAT to an authority or if it was simply an oversight.
This is the first time that a tax court has ruled that no invoice correction is necessary and that the company that made the incorrect statement is entitled to a refund from the tax office if the objective error was made unknowingly. The ruling is not yet final. An appeal to the Federal Fiscal Court (V R 16/23) is pending. In comparable cases, suspension of enforcement can be requested with reference to this procedure.
May 2024
No deduction of business expenses for legal costs to obtain post-marital maintenance
Payments of separation or post-marital maintenance to a permanently separated or divorced spouse can constitute special expenses for income tax purposes. The prerequisite for this is that the recipient of the payment declares this amount as so-called “other income” in his or her income tax return. To do this, the payer must apply for the special expense deduction and also submit the consent of the recipient of the payment to tax the maintenance payments received as “other income”.
The Federal Finance Court (BFH) had to deal with the question of whether the legal costs incurred by a maintenance recipient for conducting legal proceedings to receive or increase maintenance payments against her divorced husband can constitute business expenses. This was the decision of the responsible tax court in the first instance.
In its judgment of October 18, 2023, the BFH rejected the deductibility of the legal costs as business expenses and referred the case back to the tax court for a decision. This must now check whether at least the conditions for the deductibility of the legal costs as an “extraordinary burden” in the context of income taxation are met.
The Federal Fiscal Court justified its rejection of the deduction of business expenses for legal costs by arguing that there is no direct connection between maintenance payments as “other income” and the legal costs incurred. Rather, the payer must first have the will to deduct special expenses in the context of the income tax return and the recipient of the payment must then also agree. Even if the recipient of the payment has already agreed in advance for several years, the approach does not change because of the necessary application from the payer.
All contributions are compiled to the best of our knowledge. However, no liability or guarantee can be accepted for their content. Due to the partially abbreviated representations and the individual characteristics of each individual case, the explanations cannot and should not replace personal advice.
APR 2024
APR 2024
Beschluss des Wachstumschancengesetzes
After the Bundestag passed the so-called Growth Opportunities Act on November 17, 2023 and the Bundesrat refused its required approval on November 24, 2023, the Mediation Committee was called on the same day. On February 21, 2024, the Mediation Committee proposed a result with greatly reduced measures within the legislative package. The Bundestag confirmed the mediation result on February 23, 2024, and on March 22, 2024, the Bundesrat approved the resolution recommendation.
We are preparing a more detailed summary of the content that was decided for you. First, however, we will deal with the aspects that were already established before the decision.
APR 2024
Steuerbefreiung der Einnahmen aus kleinen PV-Anlagen
Mini-Solaranlagen, oft als Balkonkraftwerke bezeichnet, erfreuen sich großer Beliebtheit, nicht zuletzt aufgrund der Förderungen in zahlreichen Städten und Bundesländern. Aber bis zu welcher Leistungsgrenze in Kilowatt können diese Anlagen von Mietern und Eigentümern betrieben werden, ohne dass Einkommensteuer auf die erzeugte Energie anfällt?
Eine Einkommensteuerbefreiung gilt für Anlagenbetreiber, wenn die Nennleistung bei Einfamilienhäusern, Nebengebäuden und Gewerbeimmobilien 30 Kilowatt (kWp) und bei Mehrfamilienhäusern und gemischt genutzten Immobilien 15 kWp je (Wohn-)Einheit nicht übersteigt – maßgeblich dabei ist die Leistung, die im sog. Marktstammdatenregister vermerkt ist. Zusätzlich gibt es eine Obergrenze von 100 kWp pro Steuerpflichtigem, unabhängig von der Anzahl der Gebäude oder Grundstücke. Zu beachten ist, dass bei Überschreiten der Obergrenze nicht nur der überschießende Teil steuerpflichtig wird, sondern es entfällt dann die Steuerbefreiung für sämtliche Anlagen.
Die PV-Anlagen müssen sich außerdem an, auf oder in einem Gebäude befinden – beispielsweise auf dem Dach oder Balkon. Das können auch Nebengebäude wie etwa Garagen, Carports oder Gartenhäuser sein. Dabei spielt es keine Rolle, ob die Gebäude sich im Eigentum des Betreibers befinden oder nicht. Anlagen auf Freiflächen, wie Wiesen, sind nicht steuerbefreit. Steuerbefreit sind des Weiteren, wenn die o.g. Voraussetzungen erfüllt wurden:
- Einnahmen durch Einspeisevergütung
- Entgelte für Stromlieferungen an Mieter
- Vergütungen für das Aufladen von Fahrzeugen
- Zuschüsse sowie Umsatzsteuererstattungen
Ebenso besteht eine Steuerbefreiung ab 2022, wenn Betreiber neben der Einspeisung ins Stromnetz auch Strom für ihre selbstgenutzte Wohnung, Büroräume oder Elektrofahrzeuge entnehmen. Die Kehrseite ist, dass die „zwangsweise Steuerbefreiung“ auch für vor 2022 errichtete Anlagen gilt und bislang in Anspruch genommene Sonderabschreibungen nur noch sehr eingeschränkt möglich sind. Negative Einkünfte aus den Anlagen können nicht mehr berücksichtigt werden.
APR 2024
Berufliche Weiterbildung: Darlehenserlass kann Steuerlast erhöhen
Der Bundesfinanzhof (BFH) hat kürzlich entschieden (Urteil vom 23.11.2023 – VI R 9/21), dass der Teilerlass eines Darlehens, welches für eine berufliche Fortbildung gewährt wurde, als steuerpflichtiger Zufluss in dem Jahr zu werten ist, in dem der Erlass erfolgt. Dies gilt jedenfalls dann, wenn der Darlehenserlass an das Bestehen der Abschlussprüfung gekoppelt ist.
Im konkreten Fall hatte eine Angestellte für ihre berufliche Fortbildung ein Darlehen der KfW (Kreditanstalt für Wiederaufbau) in Anspruch genommen, wobei ein Teil des Auszahlungsbetrags einen nicht rückzahlbaren Zuschuss darstellte. Laut Darlehensvertrag und Förderrichtlinien sollte außerdem ein Teil des Darlehens erlassen werden, wenn die Fortbildung mit bestandener Abschlussprüfung endete. So geschah es auch hier, ein Teil des Darlehens musste dank bestandener Prüfung nicht zurückgezahlt werden. Das Finanzamt sah den Teil des Darlehens, welcher der Steuerpflichtigen erlassen wurde, als steuerpflichtige Einkünfte an.
Zwar stimmte das Finanzgericht der Steuerpflichtigen in 1. Instanz zu, doch der BFH schloss sich der Ansicht des Finanzamts an. Er begründete seine Entscheidung damit, dass der Darlehenserlass unmittelbar mit dem beruflichen Erfolg und der Weiterentwicklung der Klägerin verknüpft sei. Daher sei die jetzige Zurechnung des erlassenen Betrags als Äquivalent zu den in der Vergangenheit berücksichtigten Werbungskosten zu betrachten.
Auch der Verzicht auf Rückzahlung, sei es durch einen Arbeitgeber oder eine (staatliche) Bank, kann daher als steuerpflichtiges Einkommen gewertet werden. Die Finanzierung von Weiterbildungsmaßnahmen sowie deren Rückzahlungsmodalitäten sollten also im Zweifelsfall genau geprüft werden.
APR 2024
Einkommensteuer bei Verkauf von Immobilien aus Erbengemeinschaft
Der Bundesfinanzhof (BFH) hat sich mit aktuellem Urteil (IX R 13/22) zu der Frage geäußert, ob der entgeltliche Erwerb eines Anteils an einer Erbengemeinschaft, zu der auch Grundbesitz gehört, und die zeitnahe Veräußerung des Grundstücks ein privates Veräußerungsgeschäft darstellen, mit der Folge, dass der daraus erzielte Überschuss als sonstige Einkünfte im Rahmen der Einkommensbesteuerung steuerpflichtig wird.
Das Urteil betrifft Erben, die zu einer Erbengemeinschaft gehören und beabsichtigen, diese aufzulösen, indem sie die Anteile der anderen Miterben übernehmen und dafür eine Auszahlung leisten, um anschließend zeitnah Grundstücke oder Immobilien aus dem Nachlass zu verkaufen.
Im konkreten Fall übernahm ein Erbe die Anteile der anderen Miterben an einer Erbengemeinschaft gegen entsprechende Ausgleichszahlung. In dieser Erbmasse befand sich auch Grundbesitz. Diesen verkaufte er weniger als drei Jahre nach Eintritt des Erbfalls und weniger als ein Jahr nach Übernahme als Alleineigentümer. Normalerweise wäre der Veräußerungsgewinn aus dem Grundbesitz innerhalb von zehn Jahren nach Anschaffung einkommensteuerpflichtig, sog. Spekulationsfrist. Dieser Meinung war auch das Finanzamt und berücksichtigte den Veräußerungsgewinn bei der Einkommensbesteuerung im Einklang mit der noch gültigen Weisung des Bundesfinanzministeriums in derartigen Fällen.
Der BFH vertritt hierzu in Änderung seiner Rechtsprechung eine gegenteilige Auffassung. Der Kauf von Anteilen an einer Erbengemeinschaft ist nach seiner Auffassung nicht gleichzusetzen mit dem direkten Erwerb eines Grundstücks oder einer sonstigen Immobilie. Die Veräußerung des aus dem Nachlass stammenden Grundbesitzes bleibt daher einkommensteuerfrei, obwohl die Übernahme der Erbanteile innerhalb von 10 Jahren erfolgte.
Der Grund dafür ist, dass das erworbene und das veräußerte Wirtschaftsgut identisch sein müssen. Dies ist nach Auffassung des BFH nicht der Fall, wenn Erbanteile gekauft werden und sodann ein Grundstück der Erbmasse veräußert wird. Der Betroffene hatte nämlich nicht für das Grundstück bezahlt, sondern für die Erbanteile. Da jeder Fall individuell gelagert ist, sollte steuerrechtlicher Rat eingeholt und die Entwicklung der Gesetzgebung beachtet werden.
APR 2024
Immobilienverkauf ist privates Veräußerungsgeschäft, wenn ein Eigentümer bei Trennung auszieht
Gewinne aus Immobilienverkäufen, die innerhalb von zehn Jahren nach dem Erwerb erfolgen, unterliegen als sog. private Veräußerungsgeschäfte der Besteuerung. Dies soll Spekulationsgeschäfte am Immobilienmarkt eindämmen. Wird eine Immobilie im Eigentum des Veräußernden jedoch durchgehend oder zumindest im Jahr des Verkaufs und den beiden vorhergehenden Jahren zu eigenen Wohnzwecken genutzt, bleibt der Verkauf steuerfrei.
Mit Urteil vom 14.11.2023 (IX R 10/22), nimmt der Bundesfinanzhof (BFH) nun Stellung zu der Frage, ob Eigennutzung auch dann vorliegt, wenn nur der geschiedene Ehepartner und gemeinsame unterhaltsberechtigte Kinder des Immobilieneigentümers das betreffende Haus bewohnen und somit eine Steuerbefreiung rechtfertigen.
Im zu entscheidenden Fall übernahm ein geschiedener Mann bei der Scheidung von seiner Frau deren Anteil an der Immobilie gegen Geldzahlung und Übernahme der Verbindlichkeiten. In dieser Immobilie hatten die Eheleute mit den gemeinsamen minderjährigen Kindern während der Ehe gelebt. Der Mann war im Zuge der Trennung ausgezogen, die Kinder und die Frau blieben im Haus wohnen. Vier Jahre nach seinem Auszug verkaufte er die Immobilie, nachdem auch die Kinder und die Ex-Frau ausgezogen waren.
Der Verkauf der Immobilie erfolgte mit Gewinn, für den das Finanzamt bezogen auf die Eigentumshälfte, die der Ehemann von seiner Ex-Frau erworben hat, Einkommensteuer festsetzte. Der Ehemann vertrat die Auffassung, dass der Gewinn steuerfrei sei, da die Immobilie von seinen Kindern genutzt wurde, was steuerlich gesehen einer Eigennutzung gleichkäme. Dass die geschiedene Frau dort ebenfalls lebte, sei steuerlich wegen der Kinder unerheblich. Der BFH stellte jedoch klar, dass eine Eigennutzung nur dann vorläge, wenn der Verkäufer die Immobilie selbst bewohnt habe. Die Nutzung durch unterhaltsberechtigte Kinder könne zwar als Eigennutzung angesehen werden, jedoch nicht, wenn die Immobilie zugleich von einem Dritten, in diesem Fall der geschiedenen Ehefrau, genutzt werde. Der Verkauf der Immobilie ist daher ein privates Veräußerungsgeschäft und somit als steuerpflichtig anzusehen.
APR 2024
Bei unentgeltlicher Pflege Steuervorteil nutzen
Eine Möglichkeit zur steuerlichen Entlastung bietet sich für Personen, die Verwandte ab Pflegegrad 2 in der eigenen oder deren Wohnung unentgeltlich pflegen. Diese Wohnung darf auch im EU-Ausland oder einem EWR-Staat liegen. Der Pflege-Pauschbetrag, kann als „außergewöhnliche Belastung“ in der Steuererklärung geltend gemacht werden. Dieser steht nicht nur Verwandten, sondern auch Ehepartnern, Freunden, Nachbarn zu und wird bei mehreren Pflegenden gleichmäßig und nicht nach Pflegeaufwand geteilt. Die Höhe des Pauschbetrags richtet sich dabei nach dem Pflegegrad:
- Pflegegrad 2 – 600 €
- Pflegegrad 3 – 1.100 €
- Pflegegrad 4 und 5 – 1.800 € (gleichgestellt sind Schwerbehinderte mit Merkmal „H“ im Schwerbehindertenausweis).
Für die Inanspruchnahme des Pauschbetrags bedarf es keiner Nachweise über Ausgaben. Auch die Inanspruchnahme von Pflegediensten reduziert den Anspruch auf den Pflege-Pauschbetrag nicht, sofern der eigene Anteil an der Pflege mindestens 10 Prozent beträgt. Eine wesentliche Bedingung für den Pauschbetrag ist, dass die pflegenden Personen keine Vergütung für ihre Pflegeleistung erhalten. Hierbei wird auch das Pflegegeld als Vergütung angesehen, mit Ausnahme für Eltern, die Pflegegeld für ihr Kind erhalten. Das Pflegegeld darf jedoch vereinnahmt werden, wenn hiervon Pflegedienste oder sonstige Aufwendungen des Pflegebedürftigen bezahlt werden.